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How a Prenuptial Agreement May Keep You Happily Married

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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.

Your Employees’ Workday May Begin Sooner Than You Think

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When a workday begins can depend on the type of work performed and necessary steps to start the work each day. But with the ever-growing presence of computer software use in the workforce, can starting up and shutting down a work computer add some extra time to a paycheck? The U.S. Ninth Circuit Court of Appeals says that it is possible.

While many may be quick to compare starting up computers to waiting in line to punch a timecard, the Ninth Circuit ruled that for the call service employees at Connexx, the two are entirely different. In Cadena v. Customer Connexx LLC., decided October 24, 2022, call service employees claimed they should be compensated under the Fair Labor Standards Act (“FLSA”) for the additional 18.9 minutes it takes for their computers to turn on and off each day. Relying on the FLSA and the Portal-to-Portal Act, the Ninth Circuit found that booting up work computers could be compensable time, but shutting the computers down should not.

In specific situations, turning on computers each day can now be likened to the donning and doffing of protective gear. Without the use of functioning computers, the Ninth Circuit concluded that Connexx employees could not access any of the programs necessary to answer customer calls and perform scheduling tasks, the employees’ principal duties. Thus, the time spent starting up their work computers is integral and indispensable to the employees’ principal duties and should be compensated.

This case is a good reminder to all employers that under the FLSA, you are required to pay employees starting at the time of the first principal activity of the day. However, time that passes while the employee is waiting to begin their first activity of the day is not always compensable. For activities to be principal, and thus compensable, they must be integral and indispensable to the employee’s work. In today’s world, it isn’t as easy to determine when compensable time begins as it once used to be. With the days of punching in a timecard and walking straight to a workstation mostly behind us, employers should be aware of what tasks are integral and indispensable to their employees’ job performance and ensure they are compensating them appropriately.

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

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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

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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

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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

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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. 

Aphasia – Planning for the Unimaginable

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At 67 years of age, Bruce Willis recently disclosed his diagnosis for aphasia.  Aphasia 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

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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.

Does a Check Marked “Payment in Full” Actually Constitute Full Payment?

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I was recently asked about the ramifications of cashing a check marked “payment in full” when the amount of the check wasn’t for the full amount owed.  I get this question every once and a while, especially for clients involved in construction.  The question caused me to update myself on the current state of the law in Oregon regarding checks marked as “payment in full” or with similar language.

In the situation posed to me, the company who owed the money wrote “payment in full” in the memo line of their check.  In addition, the check was accompanied by a note which stated that the enclosed payment represented full payment of a final invoice.  However, the check was less than the amount of the final invoice and the company that issued the final invoice was adamant that they were entitled to the full amount of their final invoice.  To complicate matters, they were having some cash flow issues at the time they received the check because of a delay in payment from someone else.  While they desperately needed the money, they didn’t want to give up the remaining balance of their final invoice by cashing a check marked “payment in full.”

From a legal perspective, this dilemma raises the doctrine of accord and satisfaction.  The idea being that the payor’s offer of something less than what is actually owed would be in  satisfaction of the entire debt when the payee cashes a check marked “payment in full.”  In this situation, accord generally means to agree or concur.  From a practical perspective, especially for a creditor who badly needs the money, this potentially puts the creditor in a tough spot.

Cashing a check which includes various written designations by the issuer of the check such as “payment in full,” “paid in full,” “final payment,” and “full settlement” is interpreted by some states and courts as a complete satisfaction or discharge of the underlying debt even if the amount of the check didn’t actually constitute payment in full.  That used to be the case in Oregon a number years ago.  Fortunately, that isn’t the case anymore.

In 1997, Oregon amended the statute (i.e., ORS 73.0311) regarding accord and satisfaction.  The statute is fairly short and concise, so I’ve quoted it below:

“The negotiation of an instrument marked “paid in full,” “payment in full,” “full payment of a claim,” or words of similar meaning, or the negotiation of an instrument accompanied by a statement containing such words or words of a similar meaning, does not establish an accord and satisfaction that binds the payee or prevents the collection of any remaining amount owed upon the underlying obligation unless the payee personally, or by an officer or employee with actual authority to settle claims, agrees in writing to accept the amounts stated in the instrument as full payment of the obligation.” (emphasis added).

In the situation posed to me, the recipient of the check (i.e., the payee) didn’t (nor did anyone else with authority at the payee company), agree in any form of writing to accept the amount stated in the check as payment in full.  In addition, they had sent a few e-mails to the company that wrote the check (i.e., the payor) which stated they disputed the payor’s position that the payor didn’t owe the full amount of the final invoice from the payee.

After becoming aware of ORS 73.0311 and the current state of the law in Oregon with regard to checks marked “paid in full” and the like, the payee proceeded to notify the payor that: (1) the check did not constitute payment in full; (2) they were going to cash the check; and (3)  they would continue to seek payment of the remaining balance.  Fortunately, the check cleared the bank.  I haven’t heard if they collected the remaining balance owed on their final invoice.

Despite the language of ORS 73.0311, be careful when dealing with checks marked “paid in full” or with similar language.  I say this, in part, because of the “agreeing in writing” language in ORS 73.0311.  In my experience, I have seen some crafty (to be kind) payors send cover letters with their checks which state that that the payee’s right to endorse the check is conditioned on acceptance of the reduced amount as full payment.  In addition, crafty payors sometimes add endorsement language to the back of the check which states that endorsement of the check is an acknowledgement of payment in full.

Every fact situation is different.  As such, it is important to be cautious if faced with a situation where a party who owes money to you tries to force you to accept less than what is owed by adding restrictive “paid in full” type language to the check.  However, per Oregon law, if a payee receives a check that is marked “paid in full” or with similar language but said check does not actually constitute payment in full, the payee can confidently cash it and still seek the remaining balance as long as the payee personally, or an officer or authorized employee of the payee, does not agree in writing to accept the amounts stated in the check as payment in full of the obligation.

Should you have any questions about this issue or need any assistance collecting past due amounts, feel free to contact to me at vmw@samuelslaw.com or (503) 226-2966.

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