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Tuesday
Mar082011

Keep it in the Family? . . . Maybe Not.




You work hard and build a business or accumulate assets that you want to pass on to your children. Do you want a court to ignore your desires and give portions of your estate to people you do not name in your will?

Oregon divorce courts have been doing this very thing. The Oregon Court of Appeals effectively rewrote Oregon statutes in 2006, overturned 300 years of estate planning principles, ignored the plain wording of wills and trusts and trampled the intent of parents that want to provide for their children after their death.

In a nutshell, divorce courts can now order that one-half of inheritances and one-half of trust distributions be given to divorcing spouses. As indicated above, this turns long held estate planning principles and estate planning techniques on their ear.

The Oregon Court of Appeals recently had an opportunity to reconsider its 2006 ruling last year but declined. A bill to solve the problem died in the 2009 legislature. A similar bill has been or will likely be introduced in the current Oregon legislative session.

Until there is a legislative or judicial fix, you should add language expressing that your intent is to take care of your children and their descendants.

Divorce of a child or other beneficiary named in your will or trust can have significant implications you do not anticipate or desire. It is time to review your estate plan and consider how your desires can be fulfilled, even in the event of divorce.

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Reader Comments (1)

I like this entry, well done...
March 23, 2011 | Unregistered CommenterGail

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