How are Assets Divided in Divorce?

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Reaching the end of a divorce can be a drawn-out process with issues that seem impossible to resolve. The distribution of assets, custody (if there are children), and support, are three of the primary concerns couples face. “What is going to happen to the house? Who gets it? What about the furniture? The car? The remaining debts?”…etc.—are all questions that seem daunting to rectify. However, Oregon is an equitable distribution state and has established guidelines to help determine who gets what.

Equitable Distribution seeks to divide marital assets and debts (meaning any property or liabilities that were acquired during the marriage) in a way that both spouses leave the marriage with relatively equal footing. Each spouse is entitled to some percentage of the property—but it’s not always 50/50 when it comes to the division.

How is “equitable” calculated?

The courts vigilantly evaluate the documentation to determine how much each spouse contributed to the marriage and how they stand financially. Separate property is anything a spouse receives, such as a gift, inheritance, or other court settlements, and may not be shared, or distributed to the other party. All property is before the court, both separate and joint, however if you properly trace the funds, most times the courts will exclude the separate property from division.

What is most commonly distributed is marital property. The most common assets and debts that are considered marital property include: bank accounts, personal property, debts and loans made while as a couple, retirement/pension benefits, and the real estate that had been mutually shared. These are just a few examples and is not an exhaustive list.

For most couples, the marital home is often the largest asset acquired during the marriage and dividing it can seem impossible. Obviously the parties can agree to sell the home and divide the net proceeds fairly equally.  If one of the parties wants to keep the residence the common approach is also fairly simplified.  First, fair market value needs to be determined.  If the parties cannot agree to a value then hopefully they can agree to a joint appraisal and accept the value determined. Second, the marital equity is commonly the fair market value less the outstanding mortage(s) and lines of credit.  Costs of sale, including real estate fees, are generally not included in determining martial equity.  Third, is to determine how the party keeping the home is going to pay out the other party’s equity: refinance and cash out, greater distribution of other marital assets, assumption of greater debt, offset against spousal support etc.  It is important to remember that the only way to remove a party from the mortgage obligation is to refinance or sell the home.  At the very least you should have a refinance provision within a set period of time or requirement to sell the home at some point.

Retirement Accounts

Prior to reaching the final settlement, retirement accounts are reviewed as part of the divorce process. In the state of Oregon, a vested/unvested retirement account is considered marital property if acquired during the marriage. In the situation where the spouses cannot reach an agreement on the division of the pension, a pension valuator would be advised to determine the distribution.

If the couple can set an equal division on their own, then they will present the marital agreement to the court for review and approval. If any accounts cannot be divvied fairly by the parties, then the court will review the arguments presented at trial and ultimately determination on how best to divide the retirement accounts. It is normal to use a common valuation date and divide retirement accounts by keeping the retirement with the party who earned it as much as possible. Division of retirement accounts are nontaxable events if handled properly.


Using a mediator can be an effective tool for dividing up assets if both parties are cooperative. Through the mediation process the parties work with a mediator go through all assets, debts, or any conflicts. This initial review is documented. If the parties cannot come up with a settlement for their case then the mediation will take place with their standing lawyers and the mediator. Once an agreement is reached the settlement agreement is drafted and taken to the court for review and finally a divorce decree will be constructed.

Keep in mind that experts such as real estate agents, mediators, and pension valuators will add to the cost of the divorce. While the initial cost of the divorce might be higher, it is advised to take advantage of the help that is available at the time of settling a divorce.

Oregon’s Equitable Distribution is an exceedingly practical and convenient system to help aid the courts in the decision of the distributions for both parties.Reaching settlements is an essential piece of the divorce process and working with a lawyer (and other important experts) can maximize your ability to protect your assets and minimize your exposure to risk down the road. If you have questions regarding how assets are divided in an Oregon divorce, please give us a call.


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