Do You Have to Split Premarital Assets?

On behalf of Ronald H. Kauffman, P.A. posted in Equitable Distribution on Wednesday, April 2, 2014.

In divorced, marital property is equitably distributed, but non-marital assets – things acquired before the marriage for instance – are not. However, there is a little-known exception when the value of non-marital assets appreciates. For Harold Hamm, the billionaire founder of oil company Continental Resources, that little exception is a big headache.

Hamm ranks #68 on Forbes’ list of Global Billionaires with a net worth estimated at $14.6 billion. The Oklahoma judge presiding over Hamm’s divorce has recently ruled that he will not have to give up his controlling interest in the company because his 122 million shares are pre-marital.

However, the judge also ruled that the value of the pre-marital stock’s appreciation during the 26-year marriage may still be divided as a marital asset.

The court is essentially saying he won’t have to divide his shares. But, the court still has a duty to make an equitable distribution of what we call: enhanced value.

If the increase in value is attributable to marital effort by either party to make it grow, as opposed to market conditions, then the increase may be considered a marital asset and divisible by the court.

In the trial, the judge will determine how much of Continental Resources’s gains were due to market conditions and how much to Harold Hamm’s efforts. Gains credited to the market probably wouldn’t be included among divisible assets.

Given the size of the fortune and the lack of pre-nuptial and post-nuptial agreements, it’s possible this divorce could become one of the largest publicly known divorces.

For more information on the Hamm divorce, click here.