Laws and regulations differ from state to state, so where you live can have a huge impact on your divorce.
For example, when it comes to the division of property, Oregon uses a different approach than either of our West Coast neighbors, Washington and California. Those two are community property states.
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How are assets split in Oregon?
Oregon practices equitable distribution. The difference between community property and equitable distribution has to to with how the state views property and ownership.
In the case of community property, the state views debts and assets as belonging to both parties. When Oregon uses equitable distribution, however, the two sides, usually along with attorneys, judges, or mediators, sit down to determine a fair, just way to distribute the marital property.
In shorter marriages, the court generally wants each party to exits the marriage on similar financial footing as they entered.
When it comes to longer unions there’s more to consider. They aim to provide each party with the necessary tools and opportunities to rebuild their lives and move forward. Each case is going to be unique. But this often has a significant bearing on property division in a divorce.
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What Influences Property Division?
Equitable does not necessarily mean you divide all assets into equal parts. A number of factors come into play.
This often includes:
- Whether or not the property was obtained before the marriage,
- Whether it is held jointly or individually,
- How much each side contributed to the acquisition of the resources in question.
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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 cases where assets are commingled. Or when both parties use them with equal frequency and access. In these situations, what began as individual property can, over time, become construed as part of the larger marital estate. The court will then allotted the asset as such in a divorce.
Courts may also take into account how much property there is to divide, what to do if there are communal assets to be sold, and more. Factors like taxes, medical bills, spousal support, and the ongoing needs of any minor children are also often considered.
One thing that should not figure into property division, however, is fault.
When it comes to allocating assets, the court looks at need, future earning potential, child custody, and other components, not who or what caused the divorce. That may very well come into play in other areas, but not usually when you’re talking about splitting up material goods.
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Dividing Shared Debt
Equitable distribution states like Oregon also treat debt the same was a property.
If you accrue a financial obligation jointly, it will likely be viewed as part of the marriage and divided accordingly. Responsibility may be assigned based on each party’s ability to pay.
Preexisting liabilities, though, much like assets, usually remain with the one who incurred the balance. So don’t worry, you won’t likely be on the hook for your spouse’s student loans from years before you even met.
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Joint Property Versus Individual Property
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.
Regardless of the name on the title, Oregon generally views any assets acquired during a marriage as communal property owned jointly by both spouses.
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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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.
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The reality of property division varies a great deal from case to case. How spouses split assets depends on a number of factors and the people involved.
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. There are exceptions, but that’s how it generally goes down.
In long-term marriages, pre-existing ownership tends to be a moot point. Over time, lives comingle so much there’s little or no division.
If you’re concerned with retaining possession of certain assets in the case of divorce, there are ways to protect yourself. It may be in your best interest to talk to an attorney about a prenuptial agreement or to explore other ways to shield resources.
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