It’s no secret that property division during a divorce is not only a common area of contention between spouses, but it can be complex, and difficult to understand if you have no prior experience with property division laws in Oregon. We answer frequently asked questions surrounding property division laws, and how you can look ahead and start planning for success before filing for divorce:
What Constitutes Property?
In cases involving property division in a divorce or legal separation, “property” means something you or your spouse own, separately or together. It also means the legal right by either spouse to own something, or to use something, now or in the future. Property can be tangible (something you can touch), such houses, cars, furniture, jewelry or artwork. It can also be something intangible (things you can’t physically touch), like investment accounts, retirement plans, rental agreements, contract rights, patents or club memberships.
Does the Court Have Jurisdiction Over Property?
The court has jurisdiction to make a decision regarding the division or other disposition of all real and personal property of either or both of the parties. This includes property acquired or earned by either spouse during the marriage, regardless of whose name the property is in. It can also include property that a spouse owned separately before the marriage.
Can The Court Also Divide Debts?
As a part of the property division, the court can also order the division or other disposition of all debts and liabilities of either or both of the parties. However, this does not affect a creditor’s right to collect from either party. Debts that are commonly divided include credit cards, mortgages, car loans, IRS obligations and medical bills.
What Does “Transfer or Other Disposition” Mean?
In addition to transferring the property or debt from one party to the other. The court can also order a sale of the property, repairs or improvements to the property or placing the property into a trust.
Are There Rules About How the Property and Debts are Divided?
Property division is based on making an equitable distribution of the property that is just and proper in all circumstances. When determining what constitutes a just and proper division of property, the court will use their best judgement and discretion. It should be noted that an equitable division of the property does not necessarily mean an equal distribution.
While property acquired or earned during the marriage is usually treated differently than property a spouse owned separately before the marriage, the overall distribution is still based on an equitable distribution of property.
How Does a Judge Decide What is “Equitable” or “Just and Proper”?
The court considers both monetary and nonmonetary factors when deciding how to equitably divide property and debts. This might include financial contributions from each spouse, or their contributions as a homemaker.
An important factor when dealing with property that was separately owned by one spouse before the marriage is the extent to which that spouse has integrated it into the common financial affairs of the marital partnership or comingled it with the marital property.
Will the Court Consider a Spouse’s Nonmonetary Contributions to the Marriage?
Courts consider the nonmonetary contributions of both spouses to a marriage, including contribution as a homemaker. This includes activities such as household chores, cooking, homemaking, taking care of the children and supporting their spouse professionally.
What is an Equalizing Judgment?
If one spouse ends up with property that is worth more than the other spouse received, the court can order an equalization judgment in an amount determined necessary to set off the disproportional division of property. Property equalization judgments in a divorce are generally not taxable to the spouse receiving the payment, nor deductible for the person paying it.
Does a Premarital Agreement Affect Property Division?
Premarital agreements, or “prenups” as they’re commonly called, are legal contracts signed by both spouses prior to getting married. These contracts can take precedence over State property division laws by establishing which properties are considered separate vs marital, and by agreeing on how finances will be structured during the marriage and divided in the event of a divorce.
What Steps Should be Taken by The Spouses After the Divorce is Final?
There are several steps to take after the final judgment to ensure the property division provisions are completed. First, you should make sure to change your accounts, credit cards and other assets to be in your name only and reflect your new marital status. You also may need to change the beneficiary and fiduciary designations on any IRAs, retirement plans, insurance policies and other estate plan documents.
And very importantly… if you do not have a will, get one!
If you’d like to speak with one of our seasoned attorneys about your family law matter, don’t hesitate to contact our office at (503) 227-0200 to get connected. Our firm is here to answer your questions, provide direction, and get you started on a path towards a better tomorrow.