Divorce and Property Division in Oregon

Friday, May 23, 2014

    In Oregon, there is a presumption of equitable division of property upon divorce.

    In most cases, where there has been a long term marriage, this will mean a roughly equal division of assets.

    In this discussion, the term “assets,” and the term “property” will be used interchangeably.  Property is not restricted to real estate.  It includes all assets, including bank accounts, personal property, and retirement assets.
    Oregon is NOT, however, a community property state.

    In most cases, this means that property acquired by either husband or wife during the marriage will be divided by a divorce court.

    There are exceptions.  If a person brought property into the marriage, and kept it separate, it may be that the person will be able to keep that property when they leave.  This would likely be in addition to that person’s half of the property that was acquired during the marriage.

    This does not mean that everyone gets to keep what they brought into the marriage.  It can be a highly technical question whether the formerly separate asset was integrated into the finances of the couple.  It can also be a technical question whether, even if the asset was kept separate, it is nonetheless just and proper that the asset be considered when dividing the other assets of the couple.

    This question often gets even more complicated when the couple has been married for a long time.

    In addition, in some cases, a court may decide that an equal division of the assets is not equitable.  This may be relatively rare in longer term marriages, but it can happen.  Once again, this is a very technical issue, on which the advice of a skilled Oregon divorce lawyer can be crucial.

    Another complication relates to a relatively recent change in Oregon statute.  Formerly, property acquired by inheritance was presumed by the courts to be like all other property.  In other words, formerly, there was a presumption that all property acquired during marriage (including inherited property) was subject to this roughly equal division.  The current statute specifically says, however, that inherited property is presumed to have been intended for the benefit of the spouse who inherited the property.  Inherited property is, therefore, usually not put in the pool of assets that is subject to roughly even division, anymore.

    This presumption can be rebutted if there is evidence that the property was intended to benefit both husband and wife.
    The presumption can also become irrelevant if the inherited assets are co-mingled with other assets that are subject to division, or form the basis of the couple’s retirement plan, or the like.

    The notion of community property is also important.

    In Oregon we do not have community property unless the community property status of an asset was carefully preserved when a couple moved to Oregon from a community property state.

    However, in many ways, what people think of when they think of community property does apply, at least to the division of assets upon divorce in Oregon.

    There are  many technical differences between true community property and what we usually have in Oregon.  These differences have great importance in terms of inheritance, tax issues, and a variety of other areas.

    For purposes of the division of assets upon divorce in Oregon, however, it is fair to say that if the property or asset was acquired during the marriage, other than by gift or inheritance, it is usually subject to division in an Oregon divorce, except in extraordinary circumstances.

    It is also fair to say that, except in extraordinary circumstances, or the case of short term marriages with simple uncomplicated financial histories, the courts in Oregon usually determine that the required equitable division of assets in an Oregon divorce results in an outcome that is very nearly an equal division of assets, if the case is properly presented to the court.

    There are, of course, a variety of issues as to how property can be divided, and as to how various different kinds of property should be valued.  Other articles in this series will likely discuss the valuation of assets, the division of assets, and other topics that are integral to the determination of what an equitable (or even an equal) division of assets might be.