The short, quick answer is NO, Oregon is NOT a community property state. But what does that actually mean?
The division of property in a divorce has a substantial impact on your financial situation moving forward. Regulations vary a great deal from one state to the next, so where you live also influences this step. Our West Coast neighbors, Washington and California, both use the community property model. As a result, the question often arises:
What is Community Property Vs Equitable Distribution?
Though the regions to the north and south of us both take the community property approach, they’re actually in the minority. Only nine of the 50 states in the union—and Alaska by agreement—adhere to community property statutes. The rest practice equitable distribution. Oregon falls into this category.
But what are the differences and how do they impact divorce settlements?
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Community property states view all property and debts acquired during a marriage as belonging equally to both spouses. The law presumes joint ownership, no matter who acquired a particular asset.
In the case of divorce, the court divides property as such. This doesn’t mean they split everything equally, but that these assets are up for division.
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As opposed to community property states, equitable distribution views the property as belonging to the individual spouse who earned it. When it comes to divorce, no set rules for the division of property exist. The court divides the assets between both parties in a fair and equitable manner. The two sides sit down, usually with attorneys, judges, or mediators, to determine the ideal way to split up the marital property.
In both equitable distribution and community property states, while methods may be different, the general idea is for each spouse to emerge on relatively equal footing. Additionally, the goal is for both to maintain a standard of living similar to what they enjoyed during the marriage.
It is possible for spouses to work out how to divide property on their own. If both sides come to an agreement, the court will generally accept it, unless it skews drastically in favor of one party. Even once the courts get involved, you can make a case for ownership.
You can argue that the other spouse didn’t contribute as much to a certain acquisition. Or the two sides can also bargain and haggle. For instance, perhaps you’re willing to cede possession of a car in exchange for the title to a boat.
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Divorce also treats debt like any other piece of property. If it was accrued during the marriage, it is viewed as marital property. Financial obligations are split up based on ability to pay and who is most responsible. If it was preexisting, however, it remains the responsibility of the spouse who picked it up in the first place.
Knowing that Oregon is an equitable distribution state, not a community property state, is a good starting point for understanding the process.
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