Further, Kansas courts have specifically found that a life insurance policy is property subject to division in a divorce. In Redmond v. Redmond, 229 Kan. 565, 629 P.2d 142, 142 (1981), the Kansas Supreme Court affirmed a district court's division of a life insurance policy in a divorce action as within the court's discretion. In Hollaway v. Selvidge, 219 Kan. 345, 548 P.2d 835, 840 (1976), although the court held that the wife in that case had contracted away her right to policy proceeds, the husband's insurance policy was treated as an item of marital property under the property settlement agreement in that divorce.
K.S.A. 23-201(b) was enacted as a legislative reaction to the decision in United States v. Davis, 370 U.S. 65, 82 S.Ct. 1190, 8 L.Ed.2d 335 (1962) "where the United States Supreme Court held that inchoate rights granted to a wife in the separate property of her husband do not reach the dignity of co-ownership and thus the transfer to the wife pursuant to a property settlement agreement . . . was a taxable event." Wachholz v. Wachholz, 4 Kan. App. 2d 161, 603 P.2d 647, 650 (1979) and similar holding in Redmond v. Redmond, 229 Kan. 565, 629 P.2d 142 (1981). In other words, the Kansas legislature was enacting a property right which rises to the dignity of co-ownership in order to prevent a property settlement from being a taxable event.
The facts of this case are similar to In Re Oetinger, 49 B.R. 41 (Bankr., D.Kan. 1985). In Redmond v. Redmond, 229 Kan. 565, 629 P.2d 142 (1981), the Kansas Supreme Court approved Wachholz v. Wachholz, 4 Kan. App. 2d 161, 603 P.2d 647 (1979) which essentially found that K.S.A. 23-201(b) exists in the state of Kansas to allow trial courts the flexibility to divide property as a result of the termination of a marriage by eliminating the possibility of the division creating a taxable event. Under the facts of this case, the only viable theory which would give Mrs. Schroeder a co-ownership status in the farm earnings or property purchased with farm earnings is that she is a farming partner with Kenneth Schroeder. She is in fact a partner, therefore, it is clear that one partner may obligate the other. ( Liberty Glass Company v. Bath, 187 Kan. 54, 353 P.2d 786 (1960); Harvey v. Palmer, 179 Kan. 472, 296 P.2d 1053 (1956); Potts v. Lux, 161 Kan. 217, 222, 166 P.2d 694 (1946); K.S.A. 56-307 and K.S.A. 56-309).