Special Issues to Consider for Executive Compensation Plans in Oklahoma Dissolution Matters

In contested dissolution of marriage proceedings, Oklahoma law requires the trial court to divide property acquired jointly by the parties in a matter that is “just and reasonable, by a division of the property in kind, or by setting the same apart to one of the parties, and requiring the other thereof to be paid such sum as may be just and proper to effect a fair and just division thereof”.

Suppose a spouse is a key or highly compensated employee of their employer. In that case, they may have special compensation in addition to the qualified deferred compensation plan available to all other employees. Oklahoma courts take a very broad view of what is marital property subject to division, holding that even an unvested, contingent interest in stock options is a valuable right and divisible during a divorce if acquired during the marriage.

There are many different types of executive compensation. During a divorce involving a spouse with an interest in a non-qualified deferred compensation plan, it is important to obtain and review all of the plan documents with legal counsel and a tax accountant. Because of the special tax considerations associated with a deferred compensation plan, each plan, and any loan against the plan, should be appropriately tax adjusted before being placed in a marital balance sheet with other types of assets.