Opinion ID: 1349434
Heading Depth: 1
Heading Rank: 2

Heading: the law governing equitable division of marital property

Text: Oklahoma's statutory law requires marital property to be distributed in a just and reasonable manner. [5] The division may be accomplished either by severing the property in kind or by setting it apart to one party with compensation awarded to the other. A just and proper division of spousal assets means an equitable one. [6] The homestead must be treated in the same manner as other marital assets. [7] When the homestead is not separate property of either party, it may be awarded to one of them, with a compensating payment allowed in favor of the other being secured by a lien, if necessary. [8] Our statutory scheme does not provide an exact verbal formula for distribution of the net estate. It does not state explicitly whether debts as well as assets must be taken into account. The relevant statute, 12 O.S.Supp. 1985 § 1278, [9] addresses itself only to a division of property acquired during the marriage; it makes no specific mention of jointly incurred obligations. Extant caselaw teaches that the net worth of marital property may be determined by subtracting the liabilities from the assets. [10] If there be debts against specific spousal assets, the trial court may make an award of the encumbered property to one party and order that the other be held harmless from any debt burdening that marital asset. [11] A divorce suit is one of equitable cognizance and the trial court has discretionary power to divide the marital estate. [12] The reviewing court will not disturb the division absent some abuse of discretion [13] or a finding that the nisi prius decision is clearly contrary to the weight of the evidence. [14] In Snelling v. Snelling [15] the trial court awarded all marital assets to the husband and allocated to him the sole responsibility for discharging the spousal debts, while the wife received no property and was absolved from liability for any marital indebtedness. The wife sought a more favorable distribution on appeal. We affirmed the trial court's decision, because, once the parties' liabilities were subtracted from the value of their assets, there was nothing left for an award to the wife. The record in Snelling clearly supported the trial court's finding that the encumbrances on the property exceeded the assets and the parties were insolvent. The critical factor there was that the spousal debts were clearly identified by proof showing that the property was either mortgaged or assigned to the bank. The value of the marital estate was offset by the encumbrances against the spousal assets. In West v. West [16] the court stated that the party who relies on marital debts must prove their existence before the debt could be subtracted for computation of the spouses' net estate. The teaching of Snelling and West is that marital debts are available as an offset against conjugal property if the obligations are identified and clearly supported by the evidence.