In the interest of fairness, most states abide by either community property or equitable distribution laws. These laws guide courts on how to divvy up property during a divorce. According to FindLaw, Oregon has no such marital property laws on the books. While this allows for more flexibility during the property division process, it also provides for more uncertainty, especially concerning the family home. For this reason, there are certain considerations that a couple should discuss regarding what is to become of the home post-divorce.
To simplify the property division process, Oregon allows couples to devise their own agreements and, if legally valid, will generally accept them. If a couple has joint interest in a home, both parties should sit down and discuss what to do with the home and draw up a written agreement for each’s respective attorneys to look over.
Considerations to make when drafting an agreement
According to Time Money, selling a home is often the easiest and cleanest way to deal with a joint mortgage, especially if there is equity in the home. However, if a couple finds that the home has more sentimental value than monetary value, the parties should determine if it is financially feasible for one party to keep the home. If they decide in the affirmative, the couple should refinance the home in one spouse’s name. It is not wise for the other spouse to keep his or her name on the deed because, if the new sole homeowner misses a payment, it could negatively impact the other’s credit.
It is not uncommon for one or both spouses to want the conceding spouse to sign a quitclaim deed. Individuals should be wary of quitclaim deeds. Though they effectively remove one person’s right to a piece of property, they do not remove a person’s name from the mortgage. If the one party misses a mortgage payment, the lender may hold both parties accountable.
If a couple owes more on a home than it is worth, matters become much more complicated. The couple may then want to think about hosting a short-sale, renting out the home or continuing to live together.