USA – OKLAHOMA Law and Practice Contributed by: Aaron Bundy and Danya Bundy, Bundy
from the surviving spouse more than one-half of the property acquired by the joint industry of the spouses during the marriage. The survivor may elect against a will that attempts to do so, in a writing filed before the final distribution hearing, and the statute makes the will expressly subservient to a written antenuptial con - tract. This spousal protection is the closest thing Okla - homa has to a forced share, and it is fully waivable by agreement. A valid antenuptial agreement remains the standard consensual alternative, and Oklahoma courts have called such agreements favoured by the Oklahoma is a separate property state during the mar - riage, with equitable distribution principles applied at divorce. Property acquired during the marriage by joint industry is subject to a just and reasonable division if the marriage ends, while property owned before the marriage or received by gift or inheritance remains separate unless commingled or enhanced by marital effort. Enhancement is where these cases are won and lost. Under the seminal case of Thielenhaus v Thielenhaus , appreciation of separate property is divisible only to the extent traceable to spousal effort, skill, or funds, passive market growth stays separate, and the burden sits on the non-owning spouse, which makes tracing and forensic work decisive. Title gener - ally controls management during the marriage, so one spouse may deal with solely titled property, with an important exception for the homestead. Under 16 O.S. Section 4, both spouses must join in a conveyance of the homestead regardless of how it is titled. law for many decades. 2.4 Marital Property At death, the elective share protects the survivor’s interest in jointly acquired property. Divorce cleans up part of an estate plan automatically and leaves the rest untouched. It revokes provisions in favour of a for - mer spouse in a will under 84 O.S. Section 114, in an express trust under 60 O.S. Section 175, and in most death-benefit beneficiary designations under 15 O.S. Section 178, but federal law preempts that last stat - ute for ERISA retirement plans, which pay the named former spouse until the plan’s own form is changed. Antenuptial agreements are recognised by statute and enforced when the agreement is fair and reason - able or was signed after full and fair disclosure of the
other spouse’s assets, and inadequacy of provision alone will not void one. Independent counsel is not strictly required, although its absence invites scruti - ny, and because federal law accepts only a spouse’s post-wedding consent to waive ERISA plan survivor rights, the agreement should obligate that signature. The validity of postnuptial agreements is unsettled, with a split in appellate authority: one line of deci - sions enforces a fairly made postnuptial modification, another holds that the divorce statute permits equita - ble division to yield only to antenuptial contracts, and the Oklahoma Supreme Court has never resolved the conflict. 2.5 Transfer of Property Basis consequences follow federal law, and Okla - homa imposes no separate basis regime. A lifetime gift carries the donor’s basis over to the donee under Section 1015 of the Internal Revenue Code, together with the donor’s holding period. Property included in a decedent’s estate takes a basis equal to fair market value at death under Section 1014, which eliminates built-in gain on appreciated assets. Low-basis assets, such as long-held ranch land, minerals, founder stock, and other legacy holdings, are frequently better held until death than given away during life, while high-basis or loss assets are more advisable candidates for lifetime gifts. For Oklahoma income tax purposes, the federal basis rules flow through, and the state’s capital gain deduction can independently eliminate state tax on qualifying sales. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms Annual exclusion gifts of USD19,000 per donee and direct payments of tuition and medical expenses move wealth downstream with no transfer tax cost, and 529 contributions add the state income tax deduc - tion. Custodial accounts under the Oklahoma Uniform Transfers to Minors Act, 58 O.S. Section 1201 et seq, work for modest amounts, although custodianships end at 18 unless the transferor elects an age up to 21, so trusts are preferred for serious wealth. For larger transfers, irrevocable gift trusts with with - drawal rights, insurance trusts, grantor retained annu - ity trusts, and instalment sales to grantor trusts remain
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