how are assets divided in divorce

How is Property Divided In Oregon During Divorce?

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Laws and regulations differ from state to state, so where you live can have a huge impact on your divorce and property division.

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 fifty states—and Alaska by agreement—adhere to community property statutes. The rest practice equitable distribution and Oregon falls into this category.

What Is Equitable Distribution?

As opposed to community property states, where all property and debts acquired during a marriage as belonging equally to both spouses, 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, but 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. The goal is for both to maintain a standard of living similar to what they enjoyed during the marriage.

Separate Versus Joint Property

Before getting down to the business of dividing your property, it’s important to know that there are two kinds of property: separate property and joint property. Oregon treats both of these types of assets differently.

Separate /Premarital Property:

As the name implies, the separate property belongs to one spouse or the other. Though it’s usually something owned before marriage, this category also includes gifts or inheritance received during the marriage. The court can include separate property if fairness dictates, but in general, it remains with the owner.

In the case of premarital property, it usually stays with the original owner. For example, if you bought a car and kept it registered in your name, it will likely remain yours. This gets cloudy in longer-term marriages or in cases where assets are commingled.  In longer marriages, things become much more intertwined and the line between separate and marital property tends to blur.

Joint /Marital Property:

All property acquired or earned during a marriage generally constitutes marital property. Despite a name on a title, Oregon courts presume both spouses contributed to any assets acquired during the marriage, whether true or not. Property equally acquired is subsequently equally distributed in divorce, in a fair, equitable fashion.

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 bargain and haggle. For instance, perhaps you’re willing to cede possession of a car in exchange for the title to a boat.

Factors That Influence How Assets Are Split

The reality of property division varies a great deal from case to case. Things often become tricky when it comes to determining what belongs to who. Equitable distribution doesn’t mean the court divides all assets in half.

The court attempts to divide the assets in an equitable fashion. In order to accomplish this, they must get a clear picture of who owns what individually and what belongs to the couple as a unit.

The court looks at:

  • The number of properties factor into the equation.
  • If significant items, like a house or other property, need to be sold, the court considers costs and expenses associated with that.
  • This includes things like taxes & fees.
  • Pensions and retirement plans figure in,
  • as do medical bills.
  • Even if only one spouse works, the court accounts for other party’s role and contributions as a homemaker.

In many cases, the court subsequently distributes these items or assets in a fitting manner. During the process of property division, however, you can dispute this approach. You can argue the other did not contribute equally to the acquisition, make a case for possession, or barter for ownership.

Once the assets and debts have been classified as either marital or separate property, a value or liability is assigned to each. The court then divvies them up between the two parties in the fairest, most equitable way.

Anticipated costs also figure into the division of property. If you have children, the court accounts for their ongoing needs. This includes the ability to pay child support and provide for their care and well-being. For example, the custodial parent may get the marital home for stability and continuity’s sake.

Division of property varies wildly from case to case. How the court splits shared assets depends on a wide array of influencing factors. While a number of considerations assist in the division of property, one that doesn’t is fault. Oregon is a no-fault divorce state, so who caused a split doesn’t play a role in how assets are split. And individual judges have their own interpretations and applications of the laws and regulations.

Dealing With A Major Asset Like A House

Major assets can complicate the property division process. But there are a number of ways to go about this. Houses offer a prime example. For most people, a house represents the most valuable thing they own. Because of this, they’re usually the biggest piece of the puzzle.

In these situations, you have three common strategies.

  • You can sell the home and split the earnings.
  • One spouse or the other can refinance in his or her name and buy out the other.
  • If there are children, the custodial parent may continue to live in the home for a period. Most often this lasts until the youngest child turns 18 or graduates from high school. At that time, they either buy out the other or sell the house and split the proceeds.

Related ReadingShould You Sell Your Home During Divorce?

How Does The Court Designate Between Separate And Joint Property?

In an equitable distribution state like Oregon, in a broad sense, what you owned before the marriage will likely remain yours. On the flip side, what was acquired during the union will likely be up for division.

Things often become tricky when it comes to determining what belongs to who.  The court attempts to divide the assets in an equitable fashion. In order to accomplish this, they must get a clear picture of who owns what individually and what belongs to the couple as a unit.

In many cases, the court subsequently distributes these items or assets in a fitting manner. During the process of property division, however, you can dispute this approach. You can argue the other did not contribute equally to the acquisition, make a case for possession, or barter for ownership.

Once the assets and debts have been classified as either marital or separate property, a value or liability is assigned to each. The court then divvies them up between the two parties in the fairest, most equitable way.

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