Division of Assets and Debts
Oregon law requires the equitable distribution of property between spouses at the time of divorce. ORS 107.105(1)(f). Unfortunately, neither this statute nor case law defines “equitable.” Courts, parties’ attorneys, and the parties determine an equitable division of the parties’ assets and debts by (1) determining the existence of marital assets and debts, (2) valuing the assets and debts, and (3) assigning the assets and debts between the parties.
Determining the Existence of Assets and Debts
In mediation, parties must fully inform each other and the mediator of the marital assets and debts. Parties save time and money in mediation if they agree upon and determine their marital assets and debts prior to mediation.
Valuing Assets and Debts
Case law suggests that valuation of property not be mathematically certain. (Footnote 1) Assets are valued at their “real market value,” which is defined as the price that a willing buyer would pay knowing all the relevant facts of the property, and a price a willing seller would sell the property knowing all the relevant facts of the property. Parties to a mediation may choose to value their assets, such as (1) real estate – through an appraisal, comparative market analysis, or tax records; (2) vehicles – through Kelly Blue Book or other vehicle valuation service; (3) pension accounts (including PERS) – through an actuary; and (4) other valuable assets – through an appraising service. Generally, parties agree to a single date of valuation for all assets and debts (i.e. all debts and assets will be valued as of June 30th). Parties value debts through the amount owed at the time of the divorce.
Assigning Assets and Debts
In mediation, parties agree to the assignment of assets and debts. Prior to mediation, parties are generally not in agreement of the assignment of assets and debts, but through the process of mediation and the information shared, resolution is met 95% of the time. The goal of the majority of mediation is to achieve an equitable distribution of the assets and debts of the marriage.
1. See von Ofenheim and von Ofenheim, 40 Or App 865, 870-871, 596 P2d 1007 (1979).
|Real Estate (equity value)||$45,000.00||$24,000.00|
|2009 Buick (equity value)||$2,005.00|
|2005 Ford (equity value)||$4,000.00|
|– TOTAL DEBTS||$18,400.00||$12,800.00|
|TOTAL EQUITY VALUE||$39,800.00||$90,005.00|
|WIFE’S EQUITY VALUE||$39,800.00|
|HUSBAND’S EQUITY VALUE||$90,005.00|
* The difference between Wife’s Equity Value and Husband’s Equity Value divided by two equals the total number of dollars, here $25,102.50, from Husband to Wife necessary to equalize assets and debts.
If this example seems complicated, please do not worry. I will walk you through a painless, step-by-step discussion of asset and debt distribution. Remember, that’s why you hired me!