By Rachel Bussett
It has come to our attention recently that individuals in the midst of divorce who are also closing on real property are being informed that Oklahoma is a communal property state. This is false.
Oklahoma is not a communal property state. Oklahoma is an equitable distribution state. All states except for Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin follow the principles of equitable distribution. In these states, property acquired during the marriage belongs to the spouse who earned it. Equitable distribution and Communal Property distribution are methods of dividing property at the time of divorce.
What’s the difference you may ask? Equitable distribution applies only to marital property which for practical purposes is generally the period from the time of marriage until the time of separation.
However, if an agreement cannot be reached on the division of property and it goes before the court a judge might determine the marriage to be from the date of the marriage until the date the judge signs the divorce papers, which if highly contested can be a few years.
Equitable division means under the circumstances what is a fair division of the assets and debts of the parties according to varietal of factors. An equitable division of marital property is not always an equal division. Most people going through a divorce believe they are entitled to more of the property division because their ex committed adultery, abused alcohol or drugs, engaged in domestic violence or other criminal activities.
Generally, these actions by one party or another does not affect the division of the party’s assets and debts, it normally only becomes relevant if the actions or behaviors impacts the couple’s finances. To determine if your ex’s actions might impact your financial status contact a divorce attorney. Marital property does not include, however, property obtained during marriage by gift, bequest, devise or descent, or property otherwise provided for in a written agreement. Such property, along with any assets acquired before or after marriage, is considered the separate property of the acquiring spouse.
Next, under the equitable division distribution there is no set rule in determining who receives what or how much. To determine this a court or your attorney will review a number of factors in determining how to divide marital property.
For example, a court may consider the following: the value of one spouse staying at home or raising the children, the financial condition and earning power of each spouse, the value of each spouse’s separate property including a spouse’s business, business interests, retirement plans, 401(k) plans, stocks, bonds, etc., the degree to which each spouse contributed to the acquisition of marital property and how it was contributed, the degree to which each spouse contributed to the education and earning power of the other spouse, future financial needs and liabilities of each spouse; the ages and overall health of each spouse, the liquidity of marital property, premarital and prenuptial agreements, spousal maintenance or alimony obligations.
In a community property state, the spouses are deemed to equally own all income and assets earned or acquired during the marriage. This means that both the husband and wife are deemed to equally own all money earned by either one of them during the marriage, even if only one spouse is employed. In addition, all property acquired during the marriage with “community” money is deemed to be owned equally by both the wife and husband, regardless of who purchased it.
Property must first be characterized as either community or separate. Generally, community property is all jointly owned property acquired during the marriage by the efforts and labor of both spouses. Separate property does still apply in states who follow the communal property rule.
In conclusion, community property states are much more likely to provide for an equal distribution of community property and leave separate property intact in the absence of a need for support. If you are in a state that awards marital property equitably instead of equally, your client will likely be better off coming to an agreement with his or her spouse as to the division of community property.
This is because under the equitable distribution states there is no guarantee that you are entitled to any property equally and further one party may be assigned a portion of the debts exceeding 50%. For further questions on how Oklahoma’s equitable distribution rules would apply to your case please contact your divorce attorney.
Rachel Bussett is an Oklahoma City attorney. She can be reached at 405-605-8073.