The public policy in Oklahoma is to protect the share of the estate that must be left to the surviving spouse. Under 84 OS 213 and 84 OS 44 each person may do with their own separate property as they wish. They may exclude the surviving spouse from receive any separate property. However, joint industry property is another matter. Joint industry property is what is accumulated from the business side of the marriage. From the income received and what money is saved and invested or property purchased and owned during marriage. It does not matter that one partner makes all of the money and the other contributes to the marriage in other ways. The law views the wages earned as joint industry earnings.
The elective share statute, 84 OS 44 provides that a spouse may not by trust or will leave less than 1/2 of the joint industry property to the surviving spouse. But what happens if one spouse plans so that the joint industry property does not go through his estate by trust or will? What happens if the joint industry property is left to third parties, like a sibling or a child from a previous marriage, by a beneficial designation on a bank account instead of to the surviving spouse? That is what I am going to discuss, fraud against the marital share.
Sanditen v. Sanditen 1972 OK 39, 496 P2d 365 is an Oklahoma Supreme Court case that deals with the very question. The court stated as follows:
&1 This appeal was filed following issuance of an order of the district court sustaining a demurrer to plaintiff’s first amended petition and an order dismissing non‑resident defendants for reason of no in personam jurisdiction.
&2 Plaintiff filed a verified petition in which she alleges her husband, who is not a party to this suit, made gratuitous transfers to the defendants over a period of time of property acquired by joint efforts of plaintiff and her husband during coverture; that she had no knowledge of the transfers made by her husband, that her husband made the transfers with the intent to defraud her of her marital and vested rights; and that she is entitled to judgment against the beneficiaries for one half of the gifts together with accretions and earnings from the property.
&3 While we do not agree with plaintiff’s argument that a wife has a vested interest in jointly acquired property, we do find, by this opinion, that a married man cannot make gifts of jointly acquired property during his lifetime without the consent or knowledge of his wife where the transfer is in fraud of the wife’s marital rights.
Oklahoma the property of married persons generally fall into two classes: the
separate property of each of the parties; and jointly acquired property which
has been accumulated by the business side of the marriage. Thompson v.
Thompson, 70 Okl. 207, 173 P. 1037 (1918).
&5 In regard to the separate property of a married man, it appears to be well settled in this jurisdiction that a husband may give his separate property away, during his lifetime, if the gift is bona fide and complete and neither the wife nor children have any claim to the property of the husband or father, except so far as he is liable for their support. Farrell v. Puthoff, 13 Okl. 159, 74 P. 96 (1903). The property in this case though involves property acquired during coverture and our attention will be directed to this issue.
&6 Plaintiff argues she has a vested interest in property acquired during coverture and for that reason the gratuitous gifts were in and of itself a fraud on her marital rights. In support of her conclusion she cites two cases. Collins v. Oklahoma Tax Commission, Okl., 446 P.2d 290; Thompson v. Thompson, 70 Okl. 207, 173 P. 1037 (1918). We disagree. Both of these cases involve an interpretation of jointly acquired property under our divorce statutes. They do not purport to construe the vested interest of a wife in jointly acquired property beyond the statutory disposition of property in a divorce action. When a divorce action is pending her right to the jointly acquired property is vested. But the vesting takes place by reason of the divorce pendency under our statute and not by the marriage relationship which existed between the parties.
&7 A wife does not have joint ownership in jointly acquired property as we held in Catron v. Catron, Okl., 434 P.2d 263 (1967), for if she did that would return this jurisdiction to a community property state which was repealed by the legislature in 1949.
interest of a wife in property acquired during coverture depends upon the
occurrence of a statutorily enacted contingency such as divorce, separation,
inability to support, homestead and death, all of which emanate from the
marriage relationship. A wife then has no vested interest in property acquired
during coverture, but a contingent interest which the law protects. For
instance, it is well established a husband cannot make a gift which is
incomplete in that he retains some interest in the gift during his lifetime
thereby depriving his wife of her rights in the property at his death, as
provided in 84 O.S. 1961, Section 213 ; nor can he make a disposition of the
property anticipatory to a divorce proceeding to defeat a division of jointly
acquired property under 12 O.S. 1961, Section 1278 ; (See Bennett v. Bennett,
15 Okl. 286, 81 P. 632), nor can he transfer funds or property where his estate
is so depleted that he cannot afford to support his wife as he is required by
32 O.S. ‘ 3 ; nor can he dispose of their homestead which
is restrictive under 16 O.S. ‘ 4 . When a husband has violated these rights
his actions constitute a fraud upon the marital rights of the wife. We see no
difference in this case. If plaintiff’s husband gave away their jointly
acquired property with an intent to defraud her of her marital rights to this
property upon his death then the law should be just as responsive in protecting
her interest as in instances above stated where the gift is made anticipatory
to a divorce, or where it is given incomplete with an attempt to defeat her
interest upon his death. In all of these instances the principle criteria is
the fraudulent intent of the husband to deprive the wife of her marital rights
as provided by statute.
&9 Of course, we do not intend to diminish the authority of a husband as head of the family or interfere with his duty to support himself and his wife. By statute he has the right to use his separate property and property acquired during coverture to fulfill his marital obligations and to conduct the affairs of his business in a manner which he deems proper and necessary. Title 32 O.S. 1961, Section 3 . Nor do we intend to prohibit either spouse from making gifts of their jointly acquired property. A wife cannot complain of reasonable gifts by a husband to his children by a former marriage. In York v. Trigg, 87 Okl. 214, 209 P. 417 (1922), we held specifically that a husband may give away property acquired during coverture unless it is shown the gift was made in fraud of the marital rights and that Title 84 O.S. 1961, Section 44 , which prohibits a married man from bequeathing more than two thirds of his property away from his wife, does not in any way limit or restrict him in making such gifts. It is only when the gift has sinister elements of fraud of the marital rights that the law protects the wife. The burden of proof though rests strongly upon the wife. In determining the good faith of the charitable transfers the court must look to the condition and relationship of the parties, the amount of the gifts in relation to the husband’s estate and income and all other attending circumstances.
&10 We now direct our attention to plaintiffs petition to determine if an action for fraud has been properly pleaded. Ordinarily fraud must be distinctly and clearly pleaded and fraud will not be implied from doubtful circumstances which only awaken suspicion. Hooks v. Schulte, 178 Okl. 373, 62 P.2d 1211. But where a court can determine from the facts alleged that they constitute fraud in law, then, in absence of a motion to make more definite and certain, fraud has been properly pleaded.
&11 Plaintiff’s petition alleges the gifts of jointly acquired property were made without consideration with intent to defraud plaintiff of her marital rights. She alleges the gifts were in excess of $8,000,000.00 and that she had no knowledge of the gratuitous transfers and their magnitude with relation to the total amount of their jointly acquired property. She does not allege in particular which marital right has been violated, but the only meaning that can be attributed to her allegation is that her husband fraudulently gave the property away so she would not inherit it at his death as provided in 84 O.S. 1961 ‘ 213 . The petition is not as precise and definitive as it should be, but perhaps it is excusable in view of the unexplored area of law that is involved. In any event, we can determine from it that if the facts alleged are true then she is entitled to relief in a court of law.
&18 Judgment reversed and remanded.
The Sanditen holding is that the interest of the surviving spouse is a contingent one depending upon the occurrence of an event such as death to trigger the contingent right into a vested right. If the first spouse to die acted to defraud the surviving spouse of her share, then it should be restored. Here is what the court said: >When a husband has violated these rights his actions constitute a fraud upon the marital rights of the wife. We see no difference in this case. If plaintiff’s husband gave away their jointly acquired property with an intent to defraud her of her marital rights to this property upon his death then the law should be just as responsive in protecting her interest as in instances above stated where the gift is made anticipatory to a divorce, or where it is given incomplete with an attempt to defeat her interest upon his death. In all of these instances the principle criteria is the fraudulent intent of the husband to deprive the wife of her marital rights as provided by statute.
The holding was restated again by the appellant court in Estate of Wellshear 2006 OK CIV APP 90 cites Sanditen: &15 Oklahoma law has long recognized that if one spouse “gave away [the parties’] jointly acquired property with an intent to defraud [the other spouse] of . . . marital rights to this property upon [the giving spouse’s] death then the law should be just as responsive in protecting [the defrauded spouse’s] interest as in instances . . . where the gift is made anticipatory to a divorce, or whether it is given incomplete with an attempt to defeat [the spouse’s] interest upon [the giving spouse’s] death.” Sanditen v. Sanditen, 1972 OK 39, & 8, 496 P.2d 365, 367-68. “In all of these instances the princip[al] criteria is the fraudulent intent of [one spouse] to deprive [the other spouse] of [his/her] marital rights as provided by statute.” Id. at & 8, 496 P.2d at 368.
In Sanditen the claims of the surviving spouse against the children was equitable in nature as a cestui que trust of both a resulting trust and a constructive trust. This just means that the court will deem the surviving spouse to be a beneficiary of her share of the joint industry property and apply the legal fiction of a trust, called a resulting or constructive trust, upon the funds or against the persons who wrongfully benefitted.
In ALEXANDER V. ALEXANDER 1975 OK 101538 P2D 200. This case found that setting up a bank account to avoid the estate with joint marital funds was no in itself an act of fraud. It says that the wife has the burden to show intent to defraud her of her inheritable share of joint industry property. The court went on to say: &17 Contingent marital rights are not destroyed if the transfer is in fraud of those marital rights. It is only when there are sinister elements of fraud of the marital right that the law protects the surviving spouse. The burden of proof rests strongly on that surviving spouse. Fraud will not be implied from doubtful circumstances which only awaken suspicion. Sanditen, supra. A transfer that defeats contingent marital rights is not ineffective, per se. Fraud of those marital rights must be proven and judicially determined.
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