Christine Costantino

Heir Today, Gone Tomorrow

by

Many of my clients ask me if the money they have inherited during a marriage is “off the table” in a divorce. This can be a complicated question, and I often reply, “It depends.”

The general rule in Oregon is that inherited or gifted assets to one spouse during a marriage are not subject to the presumption of equal contribution by the other spouse in a divorce. The exception to this general rule is if a judge determines it would be “just and proper under all the circumstances” to put it back on the table, then it may be divided between the spouses in a divorce.

Let’s break this down with some examples.  If Spouse A inherits $100,000 and deposits the funds in an individual account only in Spouse A’s name, then these funds will, in most cases, be considered the separate property of Spouse A in a divorce from Spouse B.  Meaning, they remain “off the table.”  However, I said, “It depends.” In other cases, for example, where Spouse A transfers the funds to an account held with Spouse B, then those jointly held funds have now become marital assets and subject to a 50/50 division in a future divorce.  Another example is where Spouse A takes the $100,000 and purchases a home with Spouse B where both are on title.  Spouse A has now effectively commingled her $100,000 down payment with Spouse B.  If the parties divorce in the future, then Spouse B is likely going to be entitled to 50% of the home equity including the benefit of any equity created by Spouse A’s $100,000 down payment.  It is difficult to anticipate under which set of circumstances a judge might award Spouse B a share of Spouse A’s inheritance if Spouse A kept it separately from Spouse B continuously throughout the marriage.

Each case is decided on its particular facts. The moral of this story is you should never commingle any inheritance you may receive during a marriage without understanding the legal impact of such a decision. Keep it separate until you can consult with an attorney who can advise you before making costly mistakes you may not be able to reverse.

Gray Divorces – What are they and do I need one?

by

The term “gray divorce” has been trending for the last few years.  It is a popular term, and not a legal one. It relates to couples who have been in long term marriages and who discover in their later years that they just don’t want to be married to their spouse any longer. These divorces have been on the rise in my practice since coming out of the pandemic. Clients have shared that sitting in isolation for those many months allowed them to consider changes in their lives and what that would look like for themselves, their soon to be ex-spouse, and perhaps their adult children who have since left the nest.

Gray divorces are not to be taken lightly. There are serious financial issues to consider when contemplating divorce in your 50’s and later.  Many of my clients have done well saving for retirement and strategic tax planning and gifting throughout their marriage. In any divorce, gray or not, the collective bucket of money is divided and what was one set of household expenses is soon doubled.

Divorcing later in life carries its own unique considerations. Typically, retirement savings are divided in half, the marital residence which might finally be paid off is likely to be sold, and the tax planning benefits you may have had as spouses go away.  Current interest rates continue to be high; so even if you aren’t selling the house, one of you will still need a place to live.  For example, are you the one buying a new home and incurring a 15 or 30 year mortgage with an interest rate above 6% at age 55?

As in any divorce, it is important to know your rights, and understand the financial and emotional impacts it may have before you decide which way to go at the fork in the road.

– Christine Costantino

 

 

How a Prenuptial Agreement May Keep You Happily Married

by

I am often asked by clients whether they should get a prenuptial agreement or not.  Some of my clients only come to see me because their parents are “making” them get a prenuptial agreement in order to secure some future inheritance or perhaps shares in the family business.  Others have been asked to sign a prenup and they aren’t sure they should. Whatever your situation, here are some questions you should be asking before deciding whether to enter a prenuptial agreement before you say “I do.”

Do I need to get a prenuptial agreement before I actually get married, or can I get one after we are married?  Believe it or not, I do get asked this question from time to time.  The name itself answers this question: pre (BEFORE) nuptial (MARRIAGE).  So yes, you must enter this agreement with your betrothed before you are legally married.  If you don’t, then you are looking at a post-nuptial agreement which is an entirely different legal animal and we will leave that topic for another day.

Are prenuptial agreements valid?  The lawyer’s answer is, it depends.  You want to make sure you have an attorney advising you, that you both fully disclose your assets and debts to each other, and you want to make sure you have plenty of time to consider, negotiate and enter the agreement…ahead of your wedding day. These are typical challenges to whether a court will uphold your agreement.  You don’t want to take these chances and will want to meet with an attorney to make sure you have these challenges covered.  The last thing you want to see is the judge legally throwing out your prenup in the middle of a future divorce proceeding.

Why do I need a prenuptial agreement?  Prenuptial agreements are often used by clients who have amassed wealth that they do not necessarily want to share with a potential ex-spouse in a future divorce, or that they want to protect for their children from a prior relationship in the event of their death, or divorce.  Some clients may own a family business and want to make sure the business stays within the family and not with a future divorced in-law.  If you are self-employed and want to avoid sharing all of your blood, sweat and tears in building your business in a future divorce, then you should consider a prenup. If you want to protect your income from a large spousal support obligation, a prenuptial agreement can do that, or if you stand to inherit any wealth and want to make it clear from the beginning that any inheritance you may receive remains your separate property after you are married.

Have you and your betrothed had “the talk?” Better put, do you know anything about your soon to be spouse’s finances?  Are they employed?  Do they have savings? How much debt are they carrying on their credit cards?  Are they still on the mortgage with their former spouse?  Are you moving in with your spouse or are they moving into your house?  Are you putting them on the deed?  Should you put them on the deed?  How do you plan to handle your joint expenses?  Are you expected to contribute or are you going to support your beloved? If you have assets of any significance and you don’t want to take the risk of having to share half of those in a divorce, then you absolutely should be talking to an attorney to decide whether to get a prenuptial agreement.

How Will a Prenup Keep Me Happily Married? You hoped I would get here.  Here is my answer:  no one should enter a marriage without having “the talk” ahead of marriage.  Don’t make assumptions about financial issues because, in my experience, financial issues are what cause most marriages to break down.  If you determine you need a prenup, then the process of negotiating the prenup will answer most of these questions.  Once we have gone through the process, clients are relieved to know they have protected what they have built, they have control over their wealth, they can acquire joint property with their spouse without fear of losing their separate property, they can share their wealth by gifting without risking their estate planning, and they can provide for their heirs while also providing for their spouse if they want.  And if you are the spouse with the smaller estate, you can negotiate provisions that allow you to be provided for in the (hopefully) unlikely event of a divorce or the untimely death of your spouse. So starting a marriage with all of this worked out ahead of time does allow the parties to focus on the happy aspects of marriage like love and family, which should help you to stay happily married ‘til death do you part.

Social Media & Child Custody

by

Celebrity divorces are not news and many celebrities go out of their way to keep their divorces out of the mainstream and social media.  One recent exception is the ongoing divorce of “Kimye” or Kim Kardashian and Ye (aka Kanye) West.  The “Kimye” divorce has not made the news because of the size of their multi-billion-dollar marital estate; but rather much of the recent publicity has been their dispute over their 8-year-old daughter, North’s, TikTok account.  In an interview earlier this year, Kanye said “My children [aren’t] going to be on TikTok without my permission.” North shares her TikTok account with her mother, Kim, who also manages North’s account.  To date, the California court has not made any public decisions about this issue as part of the child custody claim, but will in a final resolution if Kim and Kanye cannot settle their differences. 

The questions of whether and how a judge might consider a child’s use of social media in deciding which parent should be awarded custody of the child in a divorce are unsettled in Oregon. Meaning, there is no published opinion on how an Oregon trial judge has decided this question. 

Under Oregon statutes, Family Court judges determine which parent is awarded legal custody of a child by giving “primary consideration to the best interests and welfare of the child.”  With the role social media has come to play in the mental health and safety of youth, it is plausible that a court could factor in a parent’s approach to the child’s social media habits when determining custody. Factors likely to be considered are the child’s age, the nature of their posting, time allowed on social media, and whether there are any parental controls available. 

The main takeaway is that parents should use caution and seriously consider what is safe and reasonable, and what is crossing the line. Here are some things to consider if you find yourself seeking to resolve a custody dispute: 

  • Most social media sites, including Facebook, Instagram, TikTok, and Twitter, require users to be a minimum age of thirteen. If a social media company determines that your child is too young to interact with social media, the court may find a child under the company’s age requirements is too young to have their own account.  
  • There have been a number of recent studies on the effects of social media on youth that provide fodder for both proponents and opponents of youth accessing social media.  Studies, such as those linking social media use by teenagers to worsened perspectives of themselves, highlight the negatives. Yet other studies have shown that social media can provide LGBTQ+ teens support by being able to access information and communities that might otherwise be unavailable to them. Staying informed can benefit your understanding of your child’s interactions with social media and show a judge that you are taking your child’s welfare seriously. 
  • In March 2022, Instagram launched a new feature allowing parents to monitor their children’s time on the platform. Known as “Family Center,” the feature allows parents to track their children’s time and activity on Instagram. Family Center also allows parents to get updates on the accounts their children follow and allows parents to set time limits for their children. Using this tool could evidence you are monitoring your child’s social media presence in a responsible way.  
  • Like Kim managing North’s TikTok account, managing your child’s social media could be a safe middle ground. The “bio” section of Kim and North’s TikTok account even states that the account is “Managed by an adult.” 

You may not be a celebrity with hundreds of thousands of people clamoring to see what your celebrity children are up to, but that doesn’t mean that your child’s social media presence isn’t important. When it comes to deciding what is in the “best interest” of your children, be aware that their social media accounts could play a role in how a court perceives you as a parent in your child custody dispute. 

Accessibility