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What Does Equitable Distribution Mean in Oregon Divorces?

Every state in the US has rules for dividing property after a couple divorces. However, the regulations in each state vary. For example, Oregon and 40 other states have implemented equitable distribution laws. These laws require courts to divide couples’ assets fairly but not necessarily equally. 

In contrast, nine states, including California, Washington, Idaho, and Nevada, have implemented community property laws requiring spouses to split the value of all “community” (marital) assets equally. Oregon is the only West Coast state that doesn’t follow community property standards. 

Understanding how assets are divided in Oregon divorces can be confusing, especially if you have moved here from a nearby state. Keep reading to learn how these laws differ, how Oregon’s equitable distribution laws work, and how to prepare for fair property division in your split. 

What Property Is Subject to Division of Assets? 

When couples get married, they agree to financially support each other and share ownership of assets earned or purchased after the wedding. These assets are considered “joint property” in contrast to “separate property” owned by one person. 

Joint property typically consists of assets such as:

  • Money either spouse earns by working after getting married
  • Items, investments, vehicles, and real estate purchased with that money
  • Income and rent made on marital possessions
  • Intellectual property such as copyrights, patents, and trademarks created after the wedding
  • Businesses founded or significantly expanded after the marriage began
  • Debts accrued during the marriage

These are the assets that are subject to division after a divorce. In Oregon, they are to be divided in a way that the court determines is fair and just. 

Meanwhile, separate property is never subject to asset division, regardless of where you live. It always remains the original owner’s possession unless they explicitly agree to share or transfer ownership. Separate possessions include:

  • Assets either spouse owned before they got married
  • Rent, capital gains, and interest earned on other separate assets
  • Gifts and inheritances given specifically to one person
  • Debts accrued before marriage

Couples can use prenuptial agreements and postnuptial agreements to alter which specific assets are considered separate or joint property, but this is the most common breakdown. 

Comparing Equitable Distribution vs. Community Property States

Asset division aims to split up marital property in a way that’s fair to both spouses. Community property and equitable distribution states take very different approaches to how this should occur. 

Community property states assume that both members of a marriage always contribute equally to the financial success of the relationship. As such, they require courts to divide the total value of the marital estate 50/50 between spouses in a divorce, regardless of how much each person contributed. If one spouse works while the other stays home, community property states still split the marital assets equally. The only exception is that couples can negotiate different splits if they both consent. However, if either person demands the judge make a decision, the judge must issue an equal division.

In contrast, equitable distribution states do not require judges to find an equal split when a divorce goes to court. Instead, they permit judges to divide the value equitably based on each spouse’s contributions to the marriage. This may lead to the higher-income partner receiving a greater share of the joint assets and debts since it is assumed they contributed more to the marriage financially. 

Oregon’s Community Property Presumptions 

While Oregon is an equitable distribution state, it has borrowed some elements from surrounding states’ community property laws. The Oregon Revised Statutes 107.105(1)(f) states that “there is a rebuttable presumption that both parties have contributed equally to the acquisition of property during the marriage, whether such property is jointly or separately held.” 

In other words, Oregon law automatically assumes that both spouses have contributed equally to the overall marital assets when dividing them in a divorce. One person may rebut the presumption of equal contribution by proving that the other person didn’t provide a “supportive environment.” It is the responsibility of the person who wants to divide things unequally to rebut this presumption. 

Furthermore, the same law clarifies, “The court shall consider the contribution of a party as a homemaker as a contribution to the acquisition of marital assets.” State law clearly states that someone who has opted to care for the children or the house instead of working has contributed to the household. As such, simply being unemployed is not grounds to rebut the presumption of equal contribution. Despite their lack of income, stay-at-home spouses are still eligible to receive an equitable share of the marital assets. 

Factors That Oregon Courts Consider During Asset Division

There is no hard-and-fast rule for how to “equitably” divide joint property in Oregon. Instead, courts consider a variety of issues to determine what would constitute a fair distribution of assets, such as:

  • The respective financial contributions of each spouse if it is proven that one spouse did not equally contribute
  • The amount of items involved
  • The cost of selling or managing items
  • Who was most involved in the acquisition of specific assets
  • The anticipated future income and expenses of each person

In combination, the court will use these factors to divide assets fairly, though not necessarily equally.

Preparing for Equitable Distribution in Oregon Divorces

The division of assets can be quite complex in Oregon. The most effective way to prepare for the process is to talk to a skilled divorce attorney like the experts at Regele Law, LLC. Our team is available to help you understand your rights and options during divorce and asset division and pursue a fair divorce decree. Schedule your appointment with our Salem, Oregon, family law firm to learn more about how we can help you.