Chapter VI
SEPARATE PROPERTY
A note of caution: Changes in divorce law are constant and can occur at any time either through new legislation or new state or federal court decisions. Each year, many such changes will occur. Your best and most current information will come from a lawyer who is competent in divorce practice and who keeps abreast of such changes and who is familiar with your own particular marital history.
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Premarital property Enhancement value Use and commingling
Marital conveyances Gifts during marriage Unresolved issues Relation to other issues
In Oklahoma, all property owned by either party at the time of divorce is not necessarily "marital" property to be divided in the divorce -- either spouse may own "separate property". Either or both spouses may have owned property or have incurred debt before marriage which remains in existence at the time of divorce. And, during marriage, individual spouses may have received gifts of property, either from the other spouse or from another person. On occasion, the spouses may have entered into contracts during marriage which might change the character of marital property to separate.
Generally, a spouse's own separate property is not property to "divide" in the divorce case. Instead, separate property should be "set aside" to the party who owns it.
Identification of and separate accounting for separate spousal property is important, for two reasons: (1) to insure that the rightful owner of such property receives it; and (2) to segregate it from the marital estate, so that the "equitable division" discussed in Chapter 7, Marital Estate Division, is not skewed by the inclusion of values associated with the separate spousal properties owned by either party.
Premarital Property Top of Chapter
Generally, property owned (or debt owed) by a spouse prior to marriage and which has continued to be owned (or owed) by the spouse during marriage is the spouse's separate property (or debt), to be set aside to the spouse in the divorce litigation. However, under various legal theories, such separate property, or some portion of its value, can be determined to be marital property. Or, marital property can become separate.
Enhancement Value Top of Chapter
If the premarital property of a spouse has increased in value during the marriage, and if the increase is attributable to the monetary or other efforts or contribution during the time of the marriage, the "enhancement" value is a part of the marital estate. However, to the extent that the increase has been caused by market or other factors beyond the parties' control, that portion of the increased value is not part of the marital estate. And, even if either or both parties have expended money or effort in improving the separate property, if the fair market value of the item is not greater at divorce than at the time of marriage, there is no enhanced value for purposes of divorce.
Use and Commingling Top of Chapter
Some Oklahoma appellate court decisions indicate that if separate property is put to marital use it becomes marital property. However, most such decisions are not considered determinative on the subject, and the issue is essentially "up for grabs." Or, separate funds may become so commingled in a marital asset that their separate character is lost, as might occur if a spouse's premarital bank deposits are used to fund improvements on the family home. Whether such use and/or commingling of separate property for marital purpose can be retrieved as separate property by "tracing" and segregating its value from that of the marital property is not wholly resolved by our appellate courts. In some instances, such tracing is allowed, but in others, it has not been.
Marital Conveyances Top of Chapter
Not uncommonly, after marriage one spouse will convey title to certain premarital property (such as a home) to both spouses, in joint tenancy. Typically, the conveyance is determined by courts to constitute a gift - but to whom and of what type remains a cloudy issue.
If the gift be from the owning spouse to the marital estate, then (since Oklahoma is an "equitable division" state) the court could divide that asset "equitably" giving great weight to its source. However, if the gift be to the other spouse, the gift is the spouse's separate property which should be set aside to him or her as such and not be counted as part of the marital estate.
What is certain is that when such a conveyance occurs the spouse's former premarital property ought not to be wholly restored to that spouse as his/her separate property as it would be had there been no conveyance.
Further, if supported by valuable consideration and if the transaction be free from fraud, even marital property may be wholly conveyed by one spouse to the other, thereby creating a separate property interest in the receiving spouse. The property would be segregated from the marital estate when making equitable property division awards.
Gifts During Marriage Top of Chapter
Interspousal gifts during marriage belong to the person receiving the gift as his/her separate property. Likewise, gifts from third persons to a particular spouse (such as an inheritance) are not marital property. The value of such items is not included in the marital estate (subject to the applicability of any of the comments described above concerning enhanced value).
Unresolved Issues Top of Chapter
Other "separate v. marital" property issues are unresolved in Oklahoma. When property is acquired or debt is incurred by a party after separation but before the divorce case is filed, or before the decree of divorce is entered, is it separate, or is it marital? What about a claim by a party for injuries sustained in an automobile accident, or some other type of legal claim which is unresolved at the time of divorce? Viable legal arguments may be made concerning these and other unresolved "separate v. marital" property issues and, should any such issue be involved, the careful analysis and advocacy of your attorney could well determine the outcome of any such dispute.
Relation to Other Issues Top of Chapter
The above discussion has to do with property division aspects of the divorce case. Even though the separate property of a spouse should not be included within the marital estate when equitably dividing marital property and debt, it may nonetheless be considered by the trial court in the context of resolving support awards.
For example, if the separate property of a spouse is producing $10,000 per year income, the court may consider that income in determining support alimony or child support matters.
And, an Oklahoma statute provides that, "The court may set apart a portion of the separate estate of a spouse to the other spouse for the support of the children of the marriage where custody resides with that spouse." It also provides that, "Either spouse may be allowed such alimony out of the real and personal property of the other as the court shall think reasonable, having due regard to the value of such property at the time of the divorce. Alimony may be allowed from real or personal property, or both, or in the form of money judgment, payable either in gross or in installments, as the court may deem just and equitable."
Consequently, although its occurrence may be unlikely, one spouse's separate property may be used as described above to the benefit of the other spouse as custodian or for support.
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