May 19, 2007

Common Divorce Myth: “Title matters” in how property is divided

Many divorcing couples believe that “title matters.”  I hear time and time again, “the house (or stock, or stock options, or investment property) are in my name so I will get them in the divorce, right?”  Wrong.  Oregon does not follow title in determining who gets a particular asset in divorce.  Instead, the court goes through an analysis of the property based on statues and case law. 


The courts’ job at a divorce trial is to divide the property between divorcing couples as is “just and proper in all the circumstances.” ORS 107.107(1) (f).  Many people are surprised to find out that the court has the power to divide property that was acquired by a spouse before the marriage. While Oregon divorce courts seldom do this, the court can, if it needs to divide premarital property to reach a just and proper division.


There are special rules that apply to property that was acquired during the marriage by one spouse or the other.  Property that was acquired during the marriage is called a “marital asset.”  In dividing property acquired during the marriage, there is a rebuttable presumption that both spouses have contributed equally to the acquisition of property.  This clause basically means that the court’s starting point for dividing property is equal.  It doesn’t matter that the disputed property happens to be in a husband’s or a wife’s sole name.  Another similar question is “Why should he or she share in the assets when I was the one out working and making money.”  A wife’s or husband’s work as a homemaker counts as a contribution to obtaining property.  From the court’s perspective, keeping house and raising children is a contribution, just like a job outside the home.   To make matters more complicated, sometimes the court will exclude part of an asset from division.  For example, in dividing retirement accounts, the court may divide only the portion of the pension acquired during the marriage.


What does this all mean?  Just because you are solely on title does not mean you will end up with the property.  The court will undergo a complex analysis of each piece of property based on statutory and case law, and the results are not always intuitive. In the end, the court has the power to do what is fair if the analysis produces a result that is not “just and proper.”  A lawyer can help.  If you and your spouse disagree on how any asset should be divided, you should consult with a lawyer familiar with divorce and property division laws in Oregon.