Important New Case Law Confirms Protection for Vulnerable Oregonians

SYK is proud to announce financial elder abusers under ORS 124.110 cannot wipe away debts to their victims just by filing for bankruptcy.

While one would hope that would not be controversial, the previously reported cases provided too much gray area for abusers.  However, with SYK’s recent work, the Bankruptcy Appellate Panel of the Ninth Circuit held that the elements of Oregon’s financial abuse statute squarely meet the elements of the “larceny” or “embezzlement” grounds for exception to discharge of a debt under 11 U.S.C. 523(a)(4).

The case is Bryce Peltier and Kristine Diane Peltier v. Van Loo Fiduciary Services LLC, 2022 WL 4181728 (BAP No. OR-22-1000-FBGBk) (Date Filed August 16, 2022; Ordered Published September 12, 2022).

Congratulations to SYK fiduciary litigator and appellate attorney Darlene Pasieczny, who secured the original state court judgment and handled all aspects of the appeal before the BAP.   SYK bankruptcy and debtor/creditor rights attorney Jessica McConnell assisted with the adversary case filing in the bankruptcy proceedings, and was integral in helping navigate the specialized rules of that court and bankruptcy law, while fiduciary litigator Victoria Blachly assisted throughout.

Our SYK litigation team successfully preserved over $1 million of the state court financial abuse judgment in favor of our client, who is the court-appointed conservator and personal representative for the victims.

Ms. Van Loo responded to the ruling, “SYK’s help was vital.  Thank you so much for helping turn the tide in case law to protect those who have been financially victimized.’”

SYK Partner Victoria Blachly’s Work on the Uniform Law Commission

Happy 130th Birthday to the Uniform Law Commission (“ULC”)! Samuels Yoelin Kantor Fiduciary Litigation Partner Victoria Blachly is an Oregon Commissioner for the ULC.  Read our interview with Victoria about her work on the ULC.

What does the ULC do?  

The ULC “provides states with non-partisan, well-conceived and well-drafted legislation that brings clarity and stability to critical areas of state statutory law.” They do not have authority to enact legislation, rather they propose legislation to states to address legal issues that cross state lines and would benefit from uniformity.  You may know them from some of their greatest hits, like the Uniform Commercial Code or the Uniform Trust Code.

How did you become involved with the ULC?  

It’s a very long story, but let me see if I can fight my litigator’s tendency to go on forever and give you the highlights.  After seeking to make the laws in Oregon better by chairing a committee with proposed legislation for access to digital assets by personal representatives, trustees and other fiduciaries, I learned the ULC  was interested in the same project, on a national level.  I became an “Observer” to the study committee and then the drafting committee, which resulted in the Fiduciary Access to Digital Assets Act. I was impressed with the diligence of the volunteers, in striving to propose new laws to help so many.  Then, when an opening became available in 2014, I submitted my name for consideration to the Governor of Oregon.  Since then, it’s been nothing but sunshine and lollipops.

What are some highlights from your work as a Commissioner?  

The first thing that comes to mind is that I am so very grateful for meeting and working with such a dedicated group of volunteers, including the rest of the Oregon delegation:  Justice Martha Lee Walters, Lane Shetterly, Joe Willis and Carl Bjerre.  Also, the annual ULC meetings are filled with other volunteer attorneys, professors and judges that take the work seriously, are very detail-oriented and raise and address complicated legal issues with the utmost of professionalism and respect for a variety of ideas and insights.  The ULC, as a non-political group, is a refreshing contrast to how some currently opt to debate legal issues.

Tell us about some issues that the ULC is currently working on.

The number of active committees and projects is too voluminous to address here, but their website has a wealth of information available. Currently I am on a Committee for updates to the Uniform Determination of Death Act. There are a large number of medical professionals, patient advocates and lay people Observers with amazing and often heartbreaking stories, who all share their perspectives.  As science has progressed and knowledge has changed, the convergence between law and science makes the topic a challenge to decipher in a way that provides good answers to often bad choices.

Too Good To Be True: Inheritance Scams

The Federal Trade Commission just posted a strong reminder on their Consumer Advice page:  If you get a letter from an alleged law firm claiming you are the beneficiary of large piles of money, to be split between the law firm, you and some charities – but you must keep it a SECRET – it is a scam.

They suggest you delete it, warn your friends and family of the scam and report it to www.ReportFraud.ftc.gov.

Then again, if you DO get a legitimate notice of a massive and unexpected inheritance, CONGRATULATIONS! – and make sure you meet with your SYK estate planners and update your plans.

This Is ALL Of Us: Musings From the End of a Television Series and The End of A Life

NBC’s “This Is Us” aired its penultimate show last night.  It is perhaps the most poignant and heart wrenching writing and acting that I have ever seen on television.  As the matriarch of the family, Rebecca Pearson, suffers with Alzheimer’s Disease and, in a way, had already left her family behind some time ago, as her memories failed her with the insidious disease.  Her final journey is then portrayed through a series of vignettes through the cars of a train, showing her family and other important people in her life, at various ages.  The thread woven through it all is love and sharing, and a good deal of open communication.  (Those Pearsons DO love to talk.)

Planning for an aging loved one’s journey is something we all need to face with compassion and courage, and the legal tools to get the right people situated for success is apparent in the show.   Take the time to talk with an elder law attorney or estate planner to make that journey less painful.

Nobody wants to plan for their final train, but leaving behind less stress for your loved ones is important.  As they said in the show, “If something makes you sad when it ends it must’ve been pretty wonderful when it was happening.”

Social Media & Child Custody

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. 

New Guardianship Rules in Washington

I think we’ve all succumbed to the siren song of New Year’s Resolutions, right? Whether it’s losing a few pounds (guilty!), going to the gym, meditating, we all start the year with the best of intentions. Washington State is no different with the adoption of the Uniform Guardianship Act in January 2022, although unlike most of our personal resolutions, the new rules are likely to stick. “But wait,” you say, “Washington has completely overhauled its guardianship rules?” The short answer is “yes.” But Never Fear, the Washington statutes have some familiar components with some key differences, discussed below.

Jargon. The updated Washington statutes change how we refer to the parties in the proceeding, and adopted the use of terms that mirror those in Oregon. Most importantly, Washington did away with the distinction of Guardian of the Person and Guardian of the Estate. Now, you have guardianship, dealing with personal rights of the Adult, and you have conservatorship, dealing with the financial/contractual rights of the Adult. Where you formerly called a Respondent an “incapacitated person” or “alleged incapacitated person,” these folks will be referred to as “Respondent” or “Adult” (See RCW 11.130 generally). Upon petitioning for appointment of guardian or conservator for an adult, a court visitor will be appointed (RCW 11.130.280).

Representation. Respondents have the right to be represented by willing counsel (RCW 11.130.285 and RCW 11.130.385). If the Respondent does not have funds to pay a lawyer those fees can be paid by the County.

Emergency Relief. Washington now allows petitioners emergency relief for Adults who may require assistance before or during the pendency of a petition for guardianship and/or conservatorship. (See RCW 11.130.225 and RCW 11.130.320). Similarly, RCW 11.130.580 allows “other” protective arrangements, which ostensibly will be for lesser restrictive alternatives to the guardianship or conservatorship but provide protection for a vulnerable adult.

Report & Accounting.  Annual reporting and accounting requirements remain relatively the same. For example, guardians are required to report annually, and there are state/county wide forms for guardians to fill out with respect to the Adult.  Conservators are likewise required to account for their activities. Washington judges have the authority to expand the accounting period from one year to three years in certain circumstances.

Notice. Washington expanded the parties who are entitled to notice of the Petition under RCW 11.130.275 (guardianship) and RCW 11.130.370 (conservatorship). Service requirements have also changed to ensure that the Respondent, Court Visitor, and interested parties receive notice. After appointment of Guardian and Conservator, the fiduciary has expanded notice requirements to the Respondent and interested parties: post-appointment, upon delegation of duties, and for other matters concerning the Adult. The prudent practitioner will very carefully consider the provisions of RCW 11.130 relating to the duties of Guardian and Conservator or consult with experienced counsel to properly advise their client of their duties under the statute.

Forms. Model forms have been included in the statute in RCW 11.130.640– 665, which will supplement each county’s model forms. Practitioners should consult each county’s local rules and websites to confirm whether there are preferred local forms.

Court Visitor. Washington requires the appointment of a court visitor upon petition for appointment of a guardian or a conservator for an Adult (RCW 11.130.280 and RCW 11.130.380), or upon the court’s own motion. The powers and duties are outlined in RCW 11.130.280 and RCW 11.130.380

Training. While training for fiduciaries is not a new requirement, it is worth noting that Washington State provides a free online training for all proposed guardian and conservators. This training is required pre-appointment, unless good cause is shown to waive the requirement.

Washington’s shiny new statutes attempt to do a better job at protecting the liberty and autonomy of all persons, helping Adults exercise their rights to the maximum extent possible—consistent with their personal capacity. The New Year brings exciting changes in Washington law which attempt to better promote self-determination and independence while providing Adults the support and care, tailored to their needs.

Aphasia – Planning for the Unimaginable

At 67 years of age, Bruce Willis recently disclosed his diagnosis for aphasiaAphasia is a communication disorder, with various manifestations of impairments.  It can affect ones ability to understand language, including affecting speaking and writing, but aphasia does not impair one’s intelligence.  This is an important factor to appreciate.

The main symptoms of aphasia include:

  • Trouble speaking
  • Struggling with finding the right term or word
  • Using strange or wrong words in conversation
  • Trouble understanding what other people say or following conversations
  • Writing sentences that don’t make sense or trouble expressing yourself in writing
  • Speaking in short sentences or phrases
  • Using unrecognizable words

I once had an elderly client with aphasia, and she was discriminated against as generally being entirely mentally unwell, when the truth was her intelligence was still intact, but she struggled to make her words – which had once come to her so easily – match what she had actually intended to say.  Unfortunately, it was a challenge to get some medical care providers, some of her family, and the court to understand that she knew what she wanted, but we all had to sloooooooooow down to make sure she could speak her mind, and that just because she said the wrong words sometimes, it did not mean she was not capable of participating in her own advocacy.

Consider this a gentle reminder that in this fast-paced world, it is often the best strategy to slow down and show kindness, so that true understanding can occur.  Accordingly, putting together your estate plan, advance health care directive, and a power of attorney, before you need it and before there are struggles, is the best plan.

California Franchise Tax Board attacks PL 86-272 safe harbor

By Valerie Sasaki and Jacob Landsberg

Earlier this month, California became the first state to publicly adopt the Multistate Tax Commission’s (“MTC”) August 2021 interpretation of Federal Public Law 86-272 (“PL 86-272’) in Technical Advice Memorandum 2022-01. (“TAM,” To access the TAM, click here) where it provided business scenarios and the tax treatment of the scenario.

The federal law, PL 86-272 (codified at 15 USC §§381-384) creates a safe harbor for companies that are doing business in other states. PL 86-272 was first enacted in 1959. It says that a state may not impose a tax based on net income on companies whose only activity in a state is the solicitation of sales of tangible personal property. Many states that have corporate income taxes have been trying to erode the protection that PL 86-272 affords to businesses, especially in the wake of the Supreme Court’s decision in South Dakota v. Wayfair in 2018.

We were concerned when we saw the MTC’s proposed rule come out in the fall of 2021, and we’re even more concerned now that California appears to be adopting the proposal. The new interpretation, if sustained in court, will greatly increase the number of companies that have to pay California’s state net income tax.

The MTC recommends the new interpretation of “doing business” the Supreme Court adopted in South Dakota v. Wayfair, Inc.: a company “may be present in a State in a meaningful way without that presence being physical in the traditional sense of the term.” Wayfair, 138 S. Ct. 2080, 2095 (2018). Many practitioners believe that Wayfair rejected the concept of judicial precedent in favor of a nexus interpretation that allows states to tax online commerce.

In the most recent TAM, California listed 12 business scenarios and its interpretation of the tax treatment for each of those scenarios. If a business engages in more than mere solicitation and delivery, there is no income tax immunity under PL 86-272. California’s TAM lists two scenarios that it says exceed the protection of PL 86-272 and will create income tax liability for the company at issue in California:

A business that regularly provides post-sale assistance to California customers via either electronic chat or email that customers initiate by clicking on an icon on the business’s website. (Example 2)

There are several questions the TAM does not address, for example: what about chat “bots?” These are computer programs that simulate human conversation. Many companies use them on their web sites to resolve customer service matters. It is a grey area that if a business does not staff its chat function with individuals but instead an algorithm and artificial intelligence is responding to client questions, is presence established? Another technological issue is treatment of phone support. Will that qualify as solicitation? Under the new interpretation, the treatment of phones is absent, but it is not significantly different than an email or chat function.

Finally, we are concerned that company-supported user forums may create taxable presence with California. These are online venues that are designed to allow end users of products to interact with other users – some of whom may be physically located in California. Does the company’s support and hosting of those forums create taxable presence with California?

We have heard from our own clients and peers that litigation over California’s new TAM is likely and will be monitoring this area for its impact on our Oregon and Washington business customers. If California applies the TAM in audits and the courts sustain that application, this represents a massive expansion of the number of businesses California can and will tax.

A business has a website that invites viewers in California to apply for non-sales positions with the business. The website enables viewers to fill out and submit an electronic application, and also to upload a cover letter and resume. (Example 4)

This example appears to be aimed at the strong trend we’ve witnessed around “digital nomad” workers during the COVID-19 pandemic. Tax directors and CFOs of businesses should confer with their human resources departments to confirm that they are not accidentally creating nexus with California by trying cast a broad net for qualified employees.

Businesses should be aware that California did not clarify to which tax years the Technical Advice Memo will apply. It is possible California will treat it as prospective guidance and it will be used for 2022 and forward. It is also possible that California may choose to apply these standards retroactively, to prior tax years. In either event, businesses should continue to monitor this evolving situation.

I Just Took a DNA Test, Turns Out it was Irrelevant to the Determination of Legal Parentage

The relationship between parent and child is not only foundational to how we view our family structures but is an important legal designation which brings with it many rights and responsibilities. However, perhaps unlike biological parentage, there are many different ways to make a legal family. Some people may be surprised to learn that DNA and gender have no relevance to legal parentage.

In 2017, the Oregon legislature updated the parentage statutes to account for the legalization of gay marriage and the increasing use of assisted reproduction in the creation of families. As far as this author knows, all states have at one time had a statute which declares that when a man and woman are married the husband is presumed to be the father of any children born during the marriage. However, for couples who are not cisgender and heterosexual, this statutory presumption has historically omitted them—requiring the non-birthing party to formally adopt a child, even if the parties were married. The statutory change in 2017 resolved this issue by changing the presumption that any person married to the birthing party is presumed to be the legal parent to a child born during the marriage. No one can challenge the presumption of the spouse’s parentage while the parents remain married, except with the permission of the spouses—even if that person is biologically related to the child.

In practical terms this means that a child born to one member of a married couple will automatically have two legal parents regardless of the parents’ genders—no adoption required. Importantly this child’s parents will be their legal parents for all purposes—child custody, child support, and intestate succession, to name a few. For this reason, an understanding of the legal parentage statutes is important not only for those working with families, but for personal representatives and trustees who need to make determinations about who may constitute a beneficiary’s descendant. When dealing with same-sex families, personal representatives and trustees should not make assumptions about who a beneficiaries’ parents or children are but should gather all the necessary facts when determining parentage. These facts include whether the parties were married at the time of birth (or within 300 days before birth), whether there was ever an adoption, and whether there was a subsequent action regarding a party’s parentage.

If you have questions about how legal parentage may affect your legal matter, the attorneys at SYK have a wide breadth of knowledge in family law, probate administration, and estate planning, and would be happy to assist you with your issue.

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