Family Law

Heir Today, Gone Tomorrow

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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?

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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

 

 

It’s Okay to Say, “I Don’t”

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Kelly Bensimon, star of the ‘Real Housewives of New York City,’ recently called off her wedding to Scott Litner after he refused to sign a prenuptial agreement. Bensimon understood the legal protections that a prenuptial agreement would offer her and her children, and refused to marry without those protections in place.

If a prenuptial agreement is right for you and your soon-to-be spouse, be sure to allow enough time to get a prenuptial agreement prepared prior to your wedding. There are three main challenges that can invalidate a prenuptial agreement. First, each party must be represented by their own attorney and be advised of their rights, and the rights they may be giving up, or gaining, by entering a prenuptial agreement. Second, both parties need to fully disclose all of their assets and debts to each other so they both understand what they may be giving up, or protecting. Third, the prenuptial agreement must be drafted with enough time for each party to meet with their own attorney, understand their rights and responsibilities, and voluntarily sign the agreement well ahead of the wedding.

You cannot get a prenuptial agreement after you have wed. So, if you are the party who wants the prenuptial agreement and your betrothed won’t sign, then don’t be afraid to say “I don’t.”

– Chris Constantino & Jos Strauss

Supreme Court Upholds Protection for Domestic Violence Victims

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Supreme Court

On June 21, 2024, in United States v. Rahimi, the U.S. Supreme Court upheld a federal statute prohibiting individuals subject to domestic violence restraining orders from possessing a firearm. This ruling limited the scope of a Supreme Court decision in 2022—New York State Rifle and Pistol Assn., Inc. v. Bruen—that expanded gun rights in situations where a criminal defendant is considered dangerous. Now, courts may uphold gun laws that do not have a direct historic analogue. Most significantly, this ruling disarms people who are known to be dangerous to those they are closest to.  Research shows that the risk of a homicide increases by 500% if a gun is present in a domestic violence situation. The Supreme Court’s decision preserves important protection for some of society’s most vulnerable people.

-by Chris Costantino & John Wuest

We Are Leaders

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SYK Family Law Attorney Adriana Gomez is featured in this month’s edition of the Oregon State Bar Bulletin as a recipient of the Oregon New Lawyers Division (ONLD) Member Services Award. The mission of the ONLD is to assist new lawyers with the transition to practicing law in Oregon and to engage and leverage new lawyers in support of the mission, functions, and values of the Oregon State Bar. Congratulations Adriana!

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.

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. 

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

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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.

The CARES Act & Divorced or Separated Parents

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“Perhaps due to the speed with which the law was passed, the Act is silent on how it will distribute the rebate money to parents who are divorced or separated.”

On March 27, 2020, Congress passed the CARES Act, a sweeping piece of legislation aimed at providing relief to individuals, families, and businesses adversely affected by the Coronavirus pandemic. The Act will have different repercussions for individuals in different circumstances, but the provision with perhaps the broadest impact is the recovery rebate. More commonly referred to as a stimulus payment, the recovery rebate is a one-time payment to US citizens and residents. For most the recovery rebate is good news, but for unmarried, divorced, or separated parents sharing custody of their children, the rebate may usher in unwelcome complications.

Individuals who make less than $75,000 will receive $1,200 plus $500 for each child that qualifies for the Child Tax Credit. However, many parents who share equal parenting time with their children alternate which parent claims the Child Tax Credit from year to year. Perhaps due to the speed with which the law was passed, the Act is silent on how it will distribute the rebate money to parents who are divorced or separated.

The recovery rebates are based on taxpayers’ 2019 tax return (or 2018 for those who have yet to file their 2019 return). The most likely result is that the parent who claimed the children in 2019 will receive the additional money for their qualifying children. This payment is a fully refundable tax credit, meaning it can be received by taxpayers regardless of what tax is owed. The rebates are technically a prepayment by the IRS of a 2020 tax credit; whichever parent claims the children in 2020 will have the rebate factored into their 2020 taxes. For parents who claim their children in alternate years, the tax rebate poses a unique problem that the IRS has yet to address. The parent who claimed their child in 2019 will probably receive the rebate if they have not already. However, the parent who will claim the child 2020 is also likely to receive the rebate after filing, if they did not receive it previously. What is unclear is whether the IRS will require the return of any overpayment, if not both parents may benefit from the stimulus.

The IRS may address this issue in future guidance, but we recommend that amicable co-parents be proactive in discussing how they will use the rebate money so that it can best benefit the child. A frank conversation about how to use the money may prevent disagreements in the future. While we encourage parents to reach out to their attorney with questions related to the rebate, it is likely that the cost of litigation to resolve this issue will far exceed the amount of the rebate.

Emily Clark Cuellar is a litigator at Samuels Yoelin Kantor. Her practice is centered around families, and her passion is helping families navigate all the various obstacles they may face. Her practice focuses on domestic relations and fiduciary and probate litigation.

A Pandemic Economy: Modifying Spousal or Child Support Awards

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Oregon’s unemployment rate has risen to a historic high of almost 15{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} in the wake of the COVID-19 pandemic, leaving many in a state of uncertainty about how they will make ends meet. For those who are party to a child or spousal support award, a change in employment may be grounds for modifying the terms of their support award. When there has been a significant, unanticipated change in economic circumstances, the court will consider a petition to modify a child or spousal support award. You would be hard pressed to find anyone who anticipated the COVID-19 pandemic. If you have lost your job or are otherwise significantly impacted by the pandemic, you may consider requesting a child or spousal support modification.

Courts determine the child support awards using a formula based on the income of both parents as well as other factors. Because courts deviate from this formula only in extraordinary circumstances, parents who wish to modify their child support obligations should run the numbers to see if their change in income will result in a change to their child support award. The Oregon Department of Justice provides a useful calculator to help parents determine child support awards.

The guidelines for spousal support are less formulaic than those for child support. Courts will modify spousal support after a change in economic circumstances, if the modification supports the original purpose of the award. Some parties’ judgments do not specify the original purpose of the award. In those cases, the court will assume the award was based on an attempt to distribute the incomes of the parties fairly. The court may then modify the award if either party has a substantial change in income. However, if both parties have a substantial decrease in income, then the court will be less likely to modify the award because the relative position of both parties has stayed the same.

For both child and spousal support modifications the court has the authority to modify the award retroactively, but only to the date of a party’s modification request. This means if you were laid off in March or April and you do not file to modify until July, the earliest date the modification will be effective is July. Filing a motion as soon as you learn about a significant change in income is important because a retroactive award allows you to receive money for the time that motion is in court.

The first step to modifying child or spousal support is to file motion with the court and give notice to a co-parent or ex-spouse. Many courts in Oregon are currently closed or operating on limited hours due to the pandemic. If you are planning to file with your county court, you may wish to check the status of your court on the Oregon State Courts website. We encourage anyone interested in making a request for support award modification to consult an experienced family law attorney.

Emily Clark Cuellar is a litigator at Samuels Yoelin Kantor. Her practice is centered around families, and her passion is helping families navigate all the various obstacles they may face. Her practice focuses on domestic relations and fiduciary and probate litigation.

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