Oregon Property Division: An Introduction
Without any prior agreement, a court in Oregon will fairly divide the assets acquired during the marriage. This is known as equitable distribution, and the equitable means fair—not the same as equal. Marital property is divided at the time of divorce so that a spouse can leave the marriage with an equal opportunity to acquire the necessities of life. A spouse may receive greater than half of the assets in order to retain the family home and provide for children.
The assets are evaluated, debts are calculated, and then the court divides the amount. In Oregon, marital property includes anything the spouses acquired or jointly owned during the time that the couple was married, regardless of who holds legal title. Examples include real estate purchased during the marriage; debts to credit card companies; and retirement accounts contributed to while married.
Property acquired before marriage and property received as gifts or inheritance is not included in the marital estate. Generally, the court does not divide the family home if the non-married parent with whom the children will live owns the property prior to marriage. If an asset was acquired during the marriage , with resources from another source, and with the intention that it would remain non-marital, the court may exclude it from the marital estate. This is commonly used for inheritances passed to an individual and not the spouses, as long as managing or transferring property was not commingled.
Once property is designated marital, there are several factors that the courts may use to divide the assets. For example, the court can consider:
The goal is to reach a supported decision with equitable results. Then, both spouses are required to sign the Property and Debt Judgment, which legally divides the property. This can be done by agreement of the parties, but the court will retain jurisdiction to make adjustments to the property division of the judgment if the parties fail to comply.
Problems with the division of property can be troublesome. Parties may try to hide an asset such as a bank account or lie about its value. When a spouse hides property, a court may award a larger share of the property to the honest spouse. Oregon courts will ignore the asset in a property division if a spouse has lied about it.
What is Marital Property in Oregon?
According to Oregon divorce statutes, the property division process in a divorce can take two forms: an equitable division or a division based on the law of "separate property." In Oregon, the concept of marital property is loosely defined as property either spouse acquired through their joint efforts while married. Separate property is defined as property that is owned prior to marriage and is not meant to be a marital asset. While the names might suggest separate and marital property are black and white, it is important to know that some properties can fall under both categories.
If a spouse brings a house to the marriage that was in his or her name prior to the marriage and has not been touched in any way during the marriage, an Oregon court will likely consider the house separate property. However, if the spouse sells that home three years into the marriage and uses the proceeds to make a down payment on a new home, the court may consider the new home a marital asset subject to the property division process in a divorce. In other words, the act of converting separate property into marital property makes it subject to equitable division.
Oregon law also considers the appreciation of separate property during a marriage to be ripe for division. That means if separate property increases in value, the increase can be seen as a marital asset subject to equitable division. Additionally, if a spouse uses a marital asset to "improve" a separate asset, that asset may be subject to valuation and division based on the increase in value.
Typically speaking, what one spouse acquired during the marriage from their individual efforts is considered marital property. The law of separate property is even more difficult to dissect in an Oregon divorce because separate assets that are part of an estate plan are often intimately involved in the division process. An estate plan typically includes the following:
The law of estate will not divide assets held in a will. But the law of separate property requires assets held in a will to be factored into equitable division.
The definition of marital property is left intentionally broad in Oregon. This ambiguity allows courts to make fair decisions in specific cases. Never assume your assets fall into one category or the other according to the definitions above. Be sure to seek out the counsel of a qualified attorney to help you navigate your particular circumstances.
What Factors Are Used in the Division of Property?
Apart from identification of marital property versus separate property, Oregon law provides little guidance regarding equitable division of property. The fact that Oregon is an "equitable division" state means that the identification of separate and marital property does not connote the property will be equally divided. As such, courts in Oregon have very little guidance in regard to marital property division and may equally divide property, disproportionately divide property or award one spouse the entirety of the property. Generally, Oregon courts afford wide discretion in deciding how property is divided. Many factors which influence property division are based on specific facts from each marriage, but there are some general factors which courts routinely consider when dividing property in Oregon, including: These factors are not exclusive and many others may influence judges. In addition, appeals of circuit court property division awards are rationally limited because, in most cases, it is difficult to distinguish between equitable property distributions at the trial court level.
Common Property Division Issues
Given the legal complexities that generally surround property division, it is not uncommon for couple to run in to various challenges and disputes during the process. Some of the most common issues arising in these scenarios include the following:
Hidden Assets
Just as personal debt is often disguised or hidden prior to a divorce, so can assets. While it’s certainly possible that one party may be honestly unaware of a spouse’s hidden income or assets (particularly in cases where a spouse keeps finances largely separate), there are certainly instances where a party deliberately hides his or her assets in an effort to skew the resulting marital property division. This can make it difficult to accurately assess the value of assets and liabilities following divorce.
Disagreement on Contributions
With regard to debts and liabilities, many times the two parties cannot agree on who was responsible for specific debts or who benefits from them. For example, one spouse may argue that credit card debt is mostly related to personal expenses, while the other spouse feels it was personal expenses for both. Agreeing on who is responsible and how that responsibility should be divided can be a challenging step in the divorce process.
Partnership Rates
Many divorcing spouses own and operate a business, either as an LLC or a partnership. Determining the value of the business and how the ownership might be divided is often a point of contention – and again, there are some spouses who deliberately devalue the enterprise in an effort to negotiate a more favorable property division result.
Undisclosed Liabilities
In addition to hidden assets, there may be undisclosed debts. Disguising assets is a strategy many people employ when attempting to seek favorable property division results; on the other hand, those with debt may attempt to hide this information. By not disclosing loans, credit card debt, other financial liabilities or even bankruptcies, a spouse may be attempting to gain an unfair property division result.
The Role of Mediation in Property Division
Before any court will divide up your property, it will first require that you and your spouse attend mediation. In fact, all divorce actions begin with a meeting known as a Case Management Conference, or CMC. At this meeting, you will meet with a judge who will outline how the courts require you to go about dividing your marital property. You will also be required to attend a mediation session in which you and your spouse will work to amicably reach an agreement about how to divide your assets.
Although mediation is not required, both Oregon and Washington courts encourage individuals in a divorce to undergo mediation before moving forward with litigation. Mediation gives you and your spouse the chance to resolve your disputes without the added expense of a lengthy court battle. In fact, most courts require couples to undergo mediation before dividing property in order to control the costs of the divorce. When parties do agree on how to resolve a dispute , even the court will save the money of taxpayers by avoiding a costly trial. In addition, when you and your spouse resolve a dispute through mediation, you both tend to believe the outcome is fair and just because you had a hand in choosing the result.
Even more courts encourage mediation when the couple has children. Divorcing spouses with children are required to attend a parenting seminar where they learn about how sharing custody of their child will affect their lives. Most courts see that parents who have had to work together to create a plan for their children are less likely to fight in the future and therefore encourage these parents to work together during the divorce process.
For many people, going through the mediation process makes sense. It saves both the court’s and client’s time and money. It helps couples feel more satisfied with the outcome of negotiations and lets people get on with their new lives.
Getting Legal Help and Financial Planning
When dealing with the division of assets after the end of a marriage, getting legal advice is worthwhile. Laws regarding Oregon divorce will dictate how property is distributed, and having a strong understanding of these laws is necessary. Oregon is an equitable distribution state, so what is considered "equitable" will vary from case to case. Having an attorney who is knowledgeable in the area of property division can ensure contested assets are not wrongly distributed. In addition, there are several ways of dividing property that may be taken into consideration by the courts. An attorney can help provide guidance so specific methods are applied correctly.
Working with financial advisors or certified divorce financial analysts during the divorce process can also be incredibly valuable. Financial advisors aid in providing reports on marital property, researching values, and providing suggestions for tactful ways to divide assets. There are a few options available in the division of assets, and attorneys and legal analysts can assist in determining which would be the most beneficial option. A certified financial planner may even provide other services that could prove useful when going through a divorce.
Conclusion: What to Consider in Property Division
In conclusion, dividing assets and debts during a divorce in Oregon can be a complicated process. There is no set formula for equal property and debt division. All matters related to the division of marital property and debt, as well as issues relating to child support, can be resolved in a negotiated agreement.
The Oregon divorce process involves so many factors that it is important to consult with an experienced attorney who knows state laws and regulations associated with property division. An attorney can help you understand the legal process and give you advice on how to navigate property division both during the negotiations and in the adopted agreement.
During a divorce, there is a large amount of documentation, negotiations , and filing associated with property division. Specific details are essential and cannot be overlooked, so work closely with your attorney to create a list of the property and debt subject to the division. Workouts may be necessary, but your final details should be specific and accurate.
It is vital to stay organized. Begin by creating a checklist to keep track of all documents that pertain to the divorce, including tax returns, pay stubs, and more. Staying organized makes it easier to keep track of necessary deadlines and instructions.
It is important to remember that every case is unique for any number of reasons. Avoid discussing your situation with friends, family, or on social media as it can make a difficult situation more difficult.