What is a Community Property State, and is Oregon One of Them?
What is a Community Property State?
One of the biggest questions you likely have when going through or considering a divorce, is what happens to all of our stuff? Whether sentimental or monetary value, it is completely justified to have concerns about the items you collected and received during your marriage. After all, they are a huge part of your life!
When it comes to the division of assets, determining who is owed what and what is fair can come down to the state you live in; a community property state or an equitable distribution one. Of the 50 states, there are only 9 which use the community property model. But what does that mean?
In a community property state, all property and debt acquired during a marriage is considered equally owned by both spouses. This system does not mean that everything will be divided equally by the court. It only determines what assets can be considered for division. For example, if a car was purchased during your marriage, even if the car is only titled under one spouse, the law presumes it is community property and that it belongs equally to both persons. Who actually receives ownership of the vehicle will be determined by the court according to what is "just and proper."
All things acquired prior to the marriage or after the party's separation are separate property, not community property. It is a pretty fixed and firm line drawn in the sand.
In comparison to its West Coast neighbors, Oregon is NOT a community property state. Instead, Oregon follows an equitable distribution model.
How Equitable Distribution Works in Oregon
The state of Oregon (and the majority of other US states) is considered an equitable distribution state. This means that the court will divide property and assets equitably (or fairly). Under some circumstances, a 50/50 split may not always be the most equitable solution. According to Oregon Law, assets acquired during a marriage are presumed to have been acquired with equal contributions of both spouses and are designated as marital assets. Until proven otherwise, attorneys and the court will assume that both spouses contributed equally to any marital assets.
Oregon law requires a full disclosure of all property of both parties, regardless of when the property was acquired. The items that were acquired prior to the marriage are designated as marital property (not an asset) and the presumption of equal contribution does not apply to those items.
Before awarding any assets, any previous arrangements between the couple, their histories of spending and conduct, needs of children, income, and many other factors relevant to the division of property will likely be considered.
No matter what state you live in, the dissolution of marriage and the division of assets is never cut and dry. But, if you live in Oregon, why does knowing about community property laws even matter? Depending on the type of assets you have, where your spouse or children will live, and your goals, community property laws may still apply to you.
Why Community Property Matters in an Equitable Distribution State
Though not one itself, Oregon is surrounded by community property states, including Washington, Idaho, Nevada, and California. If a married couple — or one member of the relationship – owns property in or is planning on relocating to a state that abides by a different distribution model they will need to consider their property status.
There are many reasons why a party may want to keep their community property status after moving. These could include income tax benefits on a property or giving assets to children from a prior marriage instead of the spouse. Specific laws vary depending on property jurisdiction. If this applies to you, it’s important to consult with your attorney before deciding how you and your partner want to proceed.
Another thing to consider when filing for divorce in Oregon is the length of time you have lived here. Unless you or your spouse have lived in the state for at least 6 months, the state you most recently lived in for that duration of time will probably be where you need to begin the process.
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As you can tell, divorce law is complex and there are many things to consider when dividing your property. If you are feeling overwhelmed by everything that goes into it, we are here to tell you it is completely normal.
When it comes to the division of marital property, we recommend that anyone going through a divorce or legal separation work with a family law professional to sort out these matters properly. An experienced family law attorney will help navigate you through this process, giving you back time to manage other areas of your life and the emotional toll divorce can take on everyone involved.
When it comes to dividing your assets in a divorce, you want to know you are getting what is fair and protecting your most prized assets. The family law attorneys at DBMA can help you understand how the court views the division of property and how you can prepare for the best possible outcomes in a divorce. Reach out to us today!