The Oklahoma Trust Assets in Divorce

Division of property can be a contentious part of divorce proceedings.

As a major life event, divorce results in a variety of significant changes. Among these is the division of property between ex-spouses. Whether or not a trust is marital property depends upon the composition of trust income and the legally titled trust ownership.

Equitable Distribution

Oklahoma uses the "equitable distribution" doctrine to divide property in a divorce. This means that, unlike community-property states, the court does not necessarily allocate assets on an even basis. Rather, the court will allocate assets based on an equitable basis.

Trusts as Property

If the trust is titled solely to one spouse, then the trust and its earnings are generally considered separate property. Case law in Missouri, Texas, and Colorado has found that both distributed and undistributed trust principal is separate property.

Undistributed trust income is not marital property, unless the beneficiary has the right to withdraw the trust assets. Income distributed to a beneficiary at the trustee's discretion is also separate property.

If the trust is titled to both spouses, then the trust and its earnings are considered marital property. For separate property trusts, recent court decisions indicate that a mandatory distribution of trust income received by the beneficiary during the marriage may also be marital property.

Separate Property

Oklahoma law considers property earned by one spouse prior to the marriage, gifted to the spouse, or inherited by the spouse as separate property. Each party to the divorce is entitled to 100 percent of his or her own separate property.

Marital Property

In Oklahoma, the court divides marital property in a manner that it finds just and equitable. The court has the authority to divide more property than one party than the other and to award alimony to either spouse.

In making its determination, the court will consider: monetary and non-monetary contributions to the marriage, value of the property, economic circumstances, factors contributing to the divorce, age and health of both parties, how property was originally obtained, and any other factors of the court's choosing.

References

• Kaina Law Office: Divorce Under Oklahoma Law
• The Missouri Bar: How to Protect Assets from a Beneficiary's Divorce
• Justia.com: 2006 Oklahoma Code Title 43 -- Marriage and Family