Property Division in Oregon Divorce
What is Equitable Distribution?
Equitable distribution is a way of describing property division in an Oregon divorce proceeding. Equitable distribution is distinguishable from community property which is how some states divide property in a divorce case. Community property is almost always a 50-50 split of the couples’ property. Equitable distribution is different because equitable doesn’t mean the same thing as equal. Equitable has to do with fairness so property division may be different in some respects from a community property state.
What kind of property is subject to Equitable Distribution?
Any property owned by either party and acquired during the marriage is called marital property. In a divorce case, the Court has the power to divide all of the property that is owned by either party.
Marital Asset vs. Separate Asset
When an asset is acquired has a lot to do with the Court’s decisions on property division. Generally, If an asset is acquired during the marriage, it is considered a marital asset. If it was acquired prior to the marriage, it is considered a separate asset. The reason why the marital and separate assets are important is that the presumption of equal contribution applies to marital assets but does not apply to separate assets.
The Presumption of Equal Contribution and Property Division
What the presumption of equal contribution means is that the court will presume that an asset was acquired through equal efforts of both parties. This applies to debts too. Any debts incurred by the marriage, whether its a credit card or a car loan or a mortgage, the court is going to start with the analysis of equal parts to each spouse. If one spouse did not equally contribute to the acquisition of an asset or debt, one may rebut the presumption at trial and request that the court divide the property in a way that is not equal.
Examples of situation where equitable doesn’t mean equal
Remember that equitable distribution doesn’t mean the same thing as an equal or 50 – 50 split. Sometimes, parties have only one asset, or the have several assets, but one asset is much more valuable than all other assets combined. The easiest example of the is the marital home. If, for instance, a couple is married for 20 years, they may have retirement accounts, cars, businesses, and a home. But if the home is worth $200,000 and all off the other assets are only worth $100,000, then the court has a difficult decision to make. That decision is whether or not to force the parties to sell the marital home so that the equity can be divided in a more equal distribution.
However, there may be reasons why the court would not order the sale of the marital home, even if that appears to be the only way to evenly divide the parties’ assets. The most obvious reason is if one of the parties needs the home for the purpose of raising children. That party might end up paying twice as much to rent something comparable, so the the Court may instead award the house to one party even though that is an unbalanced distribution of assets.The spouse receiving the house gets what lawyers call the “long half” of the marital estate. In the situation the court could offset the inequality caused by awarding the home to one spouse by increasing or decreasing the spousal support award or by re-arranging the parties’ responsibility for marital debts.
Another instance is when spousal support is factored in. If one parent is going to have to pay the other a lot in spousal support each month, the court may award the more valuable asset to the spouse paying the spousal support. Conversely, the court may order the paying spouse to pay a higher amount of spousal support than they normally would, because they’re getting more of the assets. When trading a property award for a support award you need to be well-versed in the tax consequences of each.
Because the standard the court uses in Oregon with regard to property division is focuses on an element of fairness rather than a straight equal split, the analysis can get really complicated really quickly. It may be a good idea to retain a competent Portland divorce attorney to help you navigate the divorce process and to protect your interests.