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Property Division in Oklahoma Divorce Cases
CANNON & ASSOCIATES is dedicated to Fierce Advocacy for those facing Dissolution of Marriage, commonly referred to as ‘Divorce”; Child Custody, and Child Support issues in state courts in central Oklahoma. It is crucial you contact an experienced Oklahoma Family Law Attorney, if you are facing Divorce or any contested family law matter. You need a Fierce Advocate to defend your rights and your property, if you are facing a contested Oklahoma Divorce. This page is an overview of the most common issues our firm’s potential family law and divorce clients are facing or concerned with regarding their property when they contact CANNON & ASSOCIATES.
Definition of Property
The legal term “Property” does not simply refer to land in Oklahoma family law. Rather, the term “Property” includes many types of assets: real estate, cars, boats, firearms, furniture, jewelry, bank accounts, retirement accounts, business interests, and in most things a person can have an “ownership interest”.
Oklahoma is an Equitable Distribution State
Oklahoma is an “Equitable Distribution” state because family law judges and courts divide marital property between spouses in a just and reasonable way. “Marital property” is different than “Separate property”. Unlike marital property, separate property are assets acquired prior to or after the marriage that remains yours after a divorce and is not subject to division by a judge. The main distinction between marital property and separate property is marital property was accumulated during the marriage as part of or a fruit of the marriage. A spouse can acquire separate property during marriage.
Property received as a “Gift” is considered separate property, if the gift is only to one spouse. However, if the gift is made to the couple it is marital property. Property received as an inheritance is separate property. When one spouse conveys part of the property to the other spouse it becomes marital property. Courts may consider property obtained in exchange for or from the proceeds of separate property as separate property as well. Basically, if acquisition of a specific item of property is unrelated to the marriage it may be considered separate property.
Oklahoma Family trial judges have wide discretion in determining division of property as separate property or marital property in Oklahoma divorce proceedings. The only statutory guidance is the division be “just and reasonable.” It is important to note Oklahoma family courts have held “just and reasonable” does not mean equal.
Factors Used to Determine Just and Reasonable Division of Property
Oklahoma family trial judge can consider the efforts of the respective parties during the marriage in Oklahoma divorce proceedings; however, Oklahoma family trial judges may not consider the relative marital fault of the parties. In other words, Oklahoma cases have held where one spouse has received or taken marital property, this must be credited to the other spouse before the remainder of the marital estate is divided. The fact one spouse earns more than the other does not justify an unequal distribution of the marital estate. In other words, a working-spouse is not entitled to a greater portion of the marital estate than the stay-at-home spouse, because both contributed, presumptively, equally to preserving the marital union.
In order to complete an equitable division of the marital estate, an Oklahoma family judge must consider not only those assets accumulated during the marriage, but also the debts of each spouse. After subtracting debts from assets, sometimes there are only one or two items of property left to divide. When neither spouse can afford to pay property division alimony in order to divide the asset’s value, the trial court can order that the asset be sold. The money from the sale can then be divided.
Severance of Jointly Help Property or Title
When parties own property jointly, Oklahoma family law judges are tasked with dividing the property by vesting title to the property in one of the spouses. By vesting title to the property in one of the spouse, the court aims to ensure that the spouse can use and enjoy their property. To do this justly, the court will typically award the entire property to one spouse and award property of similar value or alimony to the other spouse.
However, the policy behind the “Severance of Common Title” rule does not require the division be made so that one spouse is completely free of the other. Instead, a judge can award the property to one spouse and give the other a lien on the property to secure that spouse’s share of the value of the property. If parties agree the common title is not to be divided, they will own the property as tenants in common. Basically, Oklahoma family law judges will divide ownership of all property, unless the parties agree otherwise.
Modification is typically barred
The property division component of a divorce decree is a final judgment that cannot be modified. Except in cases of fraud, the decree bars a claim by either party to the property of the other spouse. The property division portion of the divorce decree survives death and is binding on both spouses’ estates.
Qualified Domestic Relations Order (“QDRO”)
In Oklahoma, retirement benefits can be allocated to a spouse during a divorce by means of a Qualified Domestic Relations Order or “QDRO”. Retirement accounts are often the most valuable asset in a marriage. The distribution of retirement benefits is very important because it can have financial impacts on both spouses.
A QDRO, pronounced “Quadro,” is a Family Law Court Order used in divorce cases to give a portion of a party’s retirement benefit to a requesting spouse. As part of the divorce settlement, the Family Law Court Order instructs a retirement plan administrator to give a certain portion of the beneficiary’s retirement benefits to his or her spouse. The order divides retirement benefits so the parties do not have to worry about making payments to the other spouse for the rest of their life.
When Do You Need a QDRO, Qualified Domestic Relations Order
A QDRO is necessary if you or your spouse have assets in a retirement plan and you are separating from your spouse, in the process of a divorce, or already divorced. The law in Oklahoma dictates that retirement benefits earned during a marriage should be treated as marital property that is subject to division between the parties upon divorce or legal separation. Once a QDRO is entered, you are legally entitled to your portion of retirement assets in your spouse’s retirement plan.
Executing a Qualified Domestic Relations Order in Oklahoma
A spouse may request an Oklahoma Family Court issue a QDRO to assist him or her in paying alimony and/or child support. In addition, a QDRO is appropriate as a tool used to divide assets as set forth by a settlement agreement.
Since Oklahoma is an Equitable Distribution State, the family law judge’s determination of how to equitably divide assets is subjective, meaning the judge has wide discretion. The general rule prohibits assigning retirement benefits during the beneficiary’s lifetime, however, Oklahoma Family Law allows an exception to this rule by use of a Qualified Domestic Relations Order. In Oklahoma family law, a spouse must do more than mention, reference, the retirement accounts in a divorce decree. Instead, for a spouse to become legally entitled to all or a portion of retirement benefits, a QDRO must be filed in addition to and separate from the Divorce Decree.
Tax Implications of a Qualified Domestic Relations Order
QDRO’s are particularly complex due to the tax implications of such a family law court order. A spouse must pay taxes immediately if they receive retirement benefits outright or if they deposit the money into a bank account. However, if the assets are deposited into a separate retirement account, taxes are not due until the money is withdrawn, years later.
Who is Eligible for a Qualified Domestic Relations Order
A QDRO is defined in the Internal Revenue Code by the IRS and the Employee Retirement Income Security Act “ERISA”. QDROs apply to those retirement plans covered by the Internal Revenue Code and ERISA, unless specifically excluded. Importantly, among those plans that are excluded from ERISA are governmental retirement plans. Thus, the retirement plans of state and municipal employees, federal employees, teachers and police officers do not include a QDRO to be used to divide the retirement plans between spouses during a legal separation or a divorce in Oklahoma. However, Oklahoma has passed laws allowing these plans to be divided in a way that mirrors a QDRO, even though they have different names.
Additionally, every retirement plan has its own set of rules. For example, some plans offer survivor benefits while other do not. Some plans allow a spouse to collect a lump sum distribution upon retirement or to choose an annuity payment for a fixed term or life, while other plans only allow one course of action. The complexity of retirement in the United States and property division in Oklahoma divorce cases requires hiring an experienced Oklahoma family law attorney.
Family law consists of many specific areas of law: Divorce; Paternity; Child Custody; Child Support; Spousal Support; and many more. Each of these areas have specific procedures and laws, which dictate the proceedings and affect the outcome of your Divorce, Child Custody case, or other Family Law matter. It is my hope this page has answered some of your questions regarding property division in divorce in Oklahoma, if not please contact CANNON & ASSOCIATES.
Experience matters when your rights and property are on the line. It is important to know the attorney you hire is the attorney handling your case and experienced in family law. John Cannon, owner of CANNON & ASSOCIATES, PLLC, will personally represent you, work along-side you during the entire process, and keep you informed. John has the experience you need and will bring it to bear in your case. Additionally, he has an outstanding record of reaching the best possible outcome for hundreds of clients, evidenced by receiving the highest possible AVVO rating – 10 (superb). Contact CANNON & ASSOCIATES to protect your rights and Fight your Case. You may send an email inquiry, complete the contact form on our website, or call at 1(405) 657-2323 for a free confidential consultation.