Division of Assets Question

[another_day]

What is the name of your state (only U.S. law)? Oklahoma

My wife and I have recently separated at her request and heartache, pain, tears and kids aside, I am now wondering about division of assets should we end up divorcing.

As I understand Oklahoma is a community or joint property state such that all assets are generally divided equally. I wonder however if there are circumstances that can affect the division of the property. Here's a summary of my situation:

married for 14 years
2 kids
wife worked some during the first several years of marriage but I was always the primary provider

here's where the issue comes in for me: about 8 years ago she decided she wanted to go to med school to be a doctor. we knew it would be a huge sacrifice for a number of years to our time, family and money but agreed the end payoff would be worth it. For several years she went back to college to take all the sciences and maths she need to get into med school along with testing and application fees and trips to visit med schools and whatnot. We paid for all of this out of pocket - easily $20,000+. Once she started med school 3 years ago we took out student loans in her name so clearly she has that debt to go with her, but even the $150,000 in debt she has accumulated for herself will be paid off in a couple years after she starts practicing. Her degree was OUR investment. If she leaves, can a $$$ value be placed on her future earnings and what I helped her to achieve?

I hope this is clear and I'll summarize. Our rough assets are $80k in home equity, $110k in my company 401k, $10k in her IRA from when she worked and $30k in cash/CD's along and obviously various belongings like furniture and stuff. The general thought of splitting all this 50/50 leaves me screwed because of all of the investment $$$ put into her education. My career and salary has suffered becasue of her medical education (which we moved out of state for her to do). While my salary stagnated and suffered, 2 years after her residency she'll be making almost twice my salary.

Comments/assistance?

 

[mistoffolees]

Actually, OK is not community property - it's equitable division. That means that marital assets will be split 50:50 unless the judge determines that pursuit of fairness indicates some other division. See, for example:
Divorce Support - Oklahoma Property Division Factors

That means that you first determine what is marital property and what is separate. If either of you owned something before the marriage, it is separate property, although any increase in value during the marriage (such as, for example, real estate appreciation) would be marital. Once you have identified the marital property, start at 50:50 and then if there is some reason to vary from that, you need to convince the judge.

In your case, you can TRY to get the judge to consider med school expenses in dividing property, but it's not all that likely. (You could argue for alimony once she starts working, but there's no guarantee you'll get that, either, since it's a couple of years in the future.) Basically, $20 K in expenditures for college and med school prep isn't a big enough number to worry about.

She will, however, be forced to take on the entire student loan debt.

 

[LdiJ]

Actually, OK is not community property - it's equitable division. That means that marital assets will be split 50:50 unless the judge determines that pursuit of fairness indicates some other division. See, for example:
Divorce Support - Oklahoma Property Division Factors

That means that you first determine what is marital property and what is separate. If either of you owned something before the marriage, it is separate property, although any increase in value during the marriage (such as, for example, real estate appreciation) would be marital. Once you have identified the marital property, start at 50:50 and then if there is some reason to vary from that, you need to convince the judge.

In your case, you can TRY to get the judge to consider med school expenses in dividing property, but it's not all that likely. (You could argue for alimony once she starts working, but there's no guarantee you'll get that, either, since it's a couple of years in the future.) Basically, $20 K in expenditures for college and med school prep isn't a big enough number to worry about.

She will, however, be forced to take on the entire student loan debt.

I agree...however, I will also add that if somehow you can convince a judge that you are entitled to recoup some "investment" in her education, it is very possible that the judge would also decide that you were responsible for a share of the TOTAL cost of her education....including the student loans. So I really don't think that you want to go there.

I also think that you are being a little unrealistic about how much money she will be making in the next few years.

She has her internship and residency to get through, and pay is rather low for those. The she will either have to buy into a practice or start her own, and the costs for doing that are pretty high. On TOP of that she is going to have the student loans to pay back.

I do agree that eventually she should be making some really decent money, but I don't think its going to happen as soon as you think its going to happen, and it may not be as much money as you think its going to be either.

 

[another_day]

I agree...however, I will also add that if somehow you can convince a judge that you are entitled to recoup some "investment" in her education, it is very possible that the judge would also decide that you were responsible for a share of the TOTAL cost of her education....including the student loans. So I really don't think that you want to go there.

I also think that you are being a little unrealistic about how much money she will be making in the next few years.

She has her internship and residency to get through, and pay is rather low for those. The she will either have to buy into a practice or start her own, and the costs for doing that are pretty high. On TOP of that she is going to have the student loans to pay back.

I do agree that eventually she should be making some really decent money, but I don't think its going to happen as soon as you think its going to happen, and it may not be as much money as you think its going to be either.

Let me add a little more. My understanding is that after med school in a year, she will start her residency with an approx salary of $40k and it will be a 3-year program. She is almost definitely going into family medicine. There are programs here that she plans to do where she will agree to work for a few years and they will set her up in a practice in a rural community and pay part of her student loans (50% i think). Thus, the first 2 years (maybe 3) after residency assuming $180k salary she will pay off her loans (which remember were reduced in half by this program).

I do appreciate the input by the way. thanks

 

[another_day]

Actually, OK is not community property - it's equitable division. That means that marital assets will be split 50:50 unless the judge determines that pursuit of fairness indicates some other division. See, for example:
Divorce Support - Oklahoma Property Division Factors

That means that you first determine what is marital property and what is separate. If either of you owned something before the marriage, it is separate property, although any increase in value during the marriage (such as, for example, real estate appreciation) would be marital. Once you have identified the marital property, start at 50:50 and then if there is some reason to vary from that, you need to convince the judge.

In your case, you can TRY to get the judge to consider med school expenses in dividing property, but it's not all that likely. (You could argue for alimony once she starts working, but there's no guarantee you'll get that, either, since it's a couple of years in the future.) Basically, $20 K in expenditures for college and med school prep isn't a big enough number to worry about.

She will, however, be forced to take on the entire student loan debt.

i'll check out that link. thanks.

 

[mistoffolees]

Let me add a little more. My understanding is that after med school in a year, she will start her residency with an approx salary of $40k and it will be a 3-year program. She is almost definitely going into family medicine. There are programs here that she plans to do where she will agree to work for a few years and they will set her up in a practice in a rural community and pay part of her student loans (50% i think). Thus, the first 2 years (maybe 3) after residency assuming $180k salary she will pay off her loans (which remember were reduced in half by this program).

I do appreciate the input by the way. thanks

Sorry, but you're looking for very long term support. In OK, even if she was making lots of money, you'd probably get about 4 years of support for a 14 year marriage. In reality, during the first year after divorce, she's still going to be in school and for the 3 years after that, she's going to be earning $40 K per year. So, for the 4 years that support MIGHT be considered, she won't have sufficient income to get you anything. The fact that at some time in the future she might make more money is quite irrelevant. The court expects you to be self-sufficient in 4 years.


Just ask for her to take all of the student loan debt (which will go through very easily since there's no chance that she will raise a successful objection) and get on with your life.

 

[LdiJ]

Let me add a little more. My understanding is that after med school in a year, she will start her residency with an approx salary of $40k and it will be a 3-year program. She is almost definitely going into family medicine. There are programs here that she plans to do where she will agree to work for a few years and they will set her up in a practice in a rural community and pay part of her student loans (50% i think). Thus, the first 2 years (maybe 3) after residency assuming $180k salary she will pay off her loans (which remember were reduced in half by this program).

I do appreciate the input by the way. thanks

You are expecting her to net 180k a year in a rural practise of family medicine? I think that your expectations are over the top.

I also agree with the advice that Misto gave you.

 

[mistoffolees]

You are expecting her to net 180k a year in a rural practise of family medicine? I think that your expectations are over the top.

Even if she did get that kind of salary (which I agree is unlikely for starting out in a rural area), she has to subtract $20-30 K in loan repayments, cost of setting up her business (any costs not incurred by her employer - as this varies quite a bit with different practices), $40-50 K in malpractice insurance (just a guess), and the cost of staying current in her field. Suddenly, she's not looking quite so rich.