Property division is often one of the most contentious issues in any divorce. For many divorcing spouses, divorce property division isn’t only a financial matter, but it can also be an emotional one. Importantly, all marital property must be distributed between the spouses in a judgment of dissolution of marriage. If the spouses cannot reach an agreement concerning who gets what after divorce, a judge will decide the outcome based on what is equitable.
Oregon follows the doctrine of equitable distribution when it comes to dividing property in a divorce case. But “equitable” does not necessarily mean “equal” or “50/50.” Rather, if the parties cannot come to an agreement, a judge will divide the marital property and assets in a way that the judge determines is fair based on the circumstances.
It’s essential to understand that equitable distribution is the way in which the court divides property in a divorce and also how attorneys will discuss division of property. When spouses negotiate a settlement out of court, they may choose how to distribute the assets, debts, and property acquired during the marriage, depending on the circumstances in their case. Generally, if the agreement they reach is fair and reasonable, an Oregon judge will accept the agreement and sign the judgment.
Every case is unique and can involve different types of marital property. Marital property refers to any property or assets owned by either party, regardless of which spouse’s name may be on the title, which spouse acquired it, or when they acquired it. Marital estate property is a subcategory of marital property that refers only to property that was acquired during the marriage. While property acquired prior to the marriage may be considered “separate” property, the court in Oregon has the authority to divide all marital property if the court determines that to do so is equitable. Oregon law assumes that each party has equally contributed to the acquisition of marital estate property (called the presumption of equal contribution), regardless of who owns it, paid for it, or otherwise.
An example of how the marital property and marital estate property can intersect would be when property acquired by one spouse prior to the marriage increases in value during the marriage. This increase in value of marital property acquired prior to the marriage will itself be considered marital estate property and be subject to the presumption of equal contribution.
The following are common examples of property that is subject to division during divorce:
In Oregon, the law presumes that each spouse contributed equally to the marriage, whether they were the breadwinner outside the household or a homemaker. However, either party in a divorce may make the argument that their economic contribution was larger than that of the other. A spouse who served as the children’s primary caretaker might also assert that their homemaker contribution was greater than the other spouse’s financial contribution. This is called rebutting the presumption of equal contribution and is a strategy for trying to convince the court to award more or less property to one party or the other.
If parties cannot come to an agreement about property, a judge will evaluate several factors when deciding which spouse gets what property after a divorce in Oregon. In determining what is fair under the doctrine of equitable distribution, a court will consider the length of the marriage, the contributions made by each spouse, and the amount of property that must be divided. A judge will also weigh the needs of any children, the anticipated future income of the spouses, and any tax impact. Retirement plans, pensions, and a spouse’s indirect homemaker contribution to the marriage are other factors a court will consider.
The same criteria are applied when the court considers how to divide responsibility for debts acquired during the marriage. Ultimately, the court can consider all of the circumstances that are in place at the time of the division of assets and debts. However, it’s vital to be aware that marital fault or adultery is not relevant in determining property division or allocating debt.
Additionally, if there is a prenuptial or postnuptial agreement in place that addresses property division and that is found to be enforceable, a court may enforce it. It is important to note that the court is not required to enforce a prenup or a postnup and that postnups in general are rarely enforced in Oregon. So while prenups and postnups can help to avoid lengthy and contentious litigation, they are not a silver bullet; the court has the final say about what is fair. If the agreement is vague, poorly drafted, or unconscionable, it will likely be disputed in court.
The marital home is usually the most valuable asset in any divorce. There are a few different options spouses may consider when determining what happens to the marital home. Some spouses prefer to sell the house during or after the divorce and divide the proceeds between them. Although this can offer both spouses a fresh start, it may not be the best option in every case.
If there are children involved, the spouses may agree that the custodial parent will continue to reside in the home for a certain period of time or until the youngest child graduates from high school; in this case, they may agree to sell the house at a later time. Another option is for one spouse to buy out the other through obtaining a refinance, home equity line of credit, or by using cash on hand.
If the spouses cannot reach an agreement concerning who gets to keep the marital home, a judge may order it to be sold and the net proceeds divided equitably upon divorce.
Property and asset division in an Oregon divorce can be complex. It’s essential to have an experienced divorce attorney on your side who can advise you regarding your legal rights and protect your interests. Based in Salem, Litowich Law is committed to finding positive solutions and achieving favorable outcomes for clients throughout Oregon. We welcome you to contact us for a consultation.