Court Reverses Decision Invalidating Change of Beneficiaries and Creation of TOD Accounts of Wife Who Died Prior to Completion of Divorce

The Supreme Court of Oklahoma reverses a district court’s judgment in favor of a husband, which invalidated IRA beneficiary changes and a transfer on death account established by his wife, who died before their divorce was complete. Because the divorce action abated upon her death, the district court did not have jurisdiction to enforce the temporary injunction originally entered in the divorce. In Johnson v. Snow (Okla., 119794, November 1, 2022).*

Arnold H. Johnson and Jacquelyn K. Johnson were in an open divorce proceeding. While it was pending, Mrs. Johnson changed the primary beneficiary of her IRA from her husband to her children. She also opened a new transfer on death account with her children as beneficiaries. Mrs. Johnson died before the court granted their divorce. Mr. Johnson petitioned the district court to invalidate these acts as violations of the temporary divorce injunction. The court ruled in his favor, holding that these accounts were marital property, Mrs. Johnson’s acts were ineffective, and Mr. Johnson was entitled to possession of the funds. The children appeal.

The Supreme Court finds that the wife’s death and resulting abatement of the divorce action deprives the district court of jurisdiction to enforce the automatic injunction. Because of the timing of Mrs. Johnson’s death, under Oklahoma law, there is no longer a marriage for the court to dissolve. Thus, the temporary injunction became a nullity that could no longer be enforced, and the court could not grant the relief requested.

Because of this lack of jurisdiction, the court could not determine whether the accounts were marital property or whether Mrs. Johnson’s acts violated the temporary injunction.

In addition, the high court concludes there was no finding by the lower court that Mrs. Johnson committed fraud in opening of any of the accounts and that whether she intended to commit fraud is immaterial. Finally, the Supreme Court finds that the Oklahoma revocation upon divorce statute does not apply in this case, and because of this, there was not a beneficiary designation to revoke.

The children are entitled to a judgment as a matter of law.

Read the full text of this decision.

* This opinion has not been released for publication as of 11/15/2022. Until released, it is subject to revision or withdrawal.