Divorce: Is Oregon a Separate or Community Property State?

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The correct answer is that Oregon is a separate property state. So what? Well, it can make a big difference when it comes to dividing assets that have accumulated in a marriage; but perhaps, not as much as you might think.

In theory if you own property separately you would assume you can keep it. Let’s do a summary of the arguments:

Does this apply to property accumulated before a marriage? Generally, yes. If you bought and paid for that beautiful car before the marriage, kept it titled in your name, it remains yours at divorce. The answer remains the same whatever you call the asset, car, investment account, or cash. The answer is it generally remains the same.

What if you buy property during the marriage that only you own? The answer is not as clear. Did you buy it with that pile of premarital cash you brought into the marriage and kept in your own account; then yes, the property is going to be yours, generally speaking.

If you bought that piece of property with money you earned during the marriage, but only put it in your name, the answer is that the value of the property will be divided at divorce. It is a marital asset (one acquired during the marriage) using income that would otherwise be available for the family. But, but, but, I earned that money and I should be able to keep what I buy. Sorry, generally, under most conditions, the asset will be shared.

Property acquired during the marriage is marital property, whether purchased by you or your spouse, whether or not it is owned jointly or separately. Generally it will be subject to division in a divorce.

What if I bought the couch with my own premarital money, but I bought it during the marriage? Technically it is your couch. But assets that you buy with your own separate money will become marital property if the use of the asset is shared and or access is shared. For example, if you take $10,000 out of a premarital personal separate account and put it into the joint checking account for use by you and your partner, it becomes a marital asset subject to division at divorce, if it is still there. You will not get paid back at the end of the marriage for separate money you contributed to the marriage.

The overriding, but rebuttable presumption is that marital property is equally acquired and is to be divided equally. Pre-marital property goes to the owner of the premarital property; unless it has become commingled, used by both parties, accessible by both parties and intended to be part of the marital estate.

In most long term marriages all property is marital. It is all subject to a presumption equal contribution and equal division. I mean, really, after 15 or more years, everything you generally have has come from the mutual effort of both parties. Maybe only one has worked outside the home, but do not underestimate the value of the spouse contribution who has contributed by staying at home; doing all that it takes to keep a home functional.

Now the real issue comes from shorter term marriages. In the 0 – 7 year range. All of the issues raised above come into play in the shorter marriage.

To those entering into a marriage where the parties have significant differences in assets, debts, education, earning capacity, etc., the real word of advice is to have a prenuptial agreement prepared. To those who are getting married later in life and each has assets they want to protect from the other; or to just keep to themselves, a prenuptial agreement is very helpful to the parties and to the court.

This summary is full of innuendos, variations, and some exceptions; but generally and I mean generally, it tells us that marital property is divided equally; that pre-marital property, if held separately, will remain separate property in a divorce. In long term marriages the issue is usually moot; but in short term marriages the issues are very important and a prenuptial agreement can be helpful in most circumstances where there are assets to be protected.

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