Separate Property and Co Mingled Assets
Generally speaking, property acquired by a spouse prior to a marriage is called separate property. Separate property is treated differently in an Oregon divorce case than Marital property, or property acquired during the marriage. But the lines between separate and marital property get blurred by what is known as co mingling of assets. Comingling is when one spouse mixes separate property with the other spouse’s marital property.
Property may start out as a separate asset and become a marital asset depending on how its treated during the marriage. That becomes a question of how easily one can trace out the separate property. For example if someone had a cashiers check from the prior sale of a home and used that as a down payment on a new house during the marriage, it makes it easier to establish to what extent one spouse’s separate property was used, and thereby determine how much should still be considered separate property.
On the other hand, if you owned a house individually before the marriage, but used funds that are marital property to make mortgage payments or improvements, that home has been co-mingled with marital assets. The property may be treated as a marital asset rather than a separate asset, even though you owned it prior to the marriage.
This can also come up in the context of gifts or inheritances. A lot of times one spouse will receive a gift or inheritance. That inheritance is separate property. It can remain separate property throughout a marriage or, if that money is co mingled in a bank account and used for marital expenses, it dissolves into marital property and the right to claw that back in a divorce is less certain.
In Oregon, the Court applies the presumption of equal contribution to marital assets. That simply means that the court will presume that the asset was acquired through equal efforts of both parties. With Separate property, the important thing to remember is that this presumption of equal contribution does not apply. Without that presumption the court is likely to say that the separate property remains with the spouse that brought it into the marriage, provided the asset hasn’t been co-mingled with marital assets. If it has been comingled, the distribution of property becomes much more complicated.
Knowing when an asset will be awarded to one party or divided by the court involves a complicated analysis that involves more than topics discussed here. The best way to protect your separate property from becoming marital property is to have an Oregon Family Law Attorney such as Henry LeSueur draft a prenuptial agreement prior to getting married. If you are already married and considering divorce we can also help you determine how the court will divide your property and provide advice to keep your most important assets safe.