3 minutes reading time (531 words)

Sometimes the Legislature Works (Inheritance and Divorce)

Property that you inherited may be immune from division of property in your divorce.

There is a “presumption of equal contribution”in Oregon divorces. The presumption is that both parties contributed equally in acquiring an asset or property. The presumption is very hard to overcome (through proof that the asset was separately acquired); until recently it worked an unfairness for property received by gift or inheritance. That type of presumption is what I will discuss, and I will talk about how the legislature modified it.

Until a few years ago, the presumption of equal contribution applied to everything a married couple received during the marriage. Originally, the presumption was intended to place a proper value on the role played by a stay-at-home wife. The legislature reasoned that if the husband was the bread winner, he was only so because his wife performed services for him at home which allowed him to focus on his job. The legislature took a look at what it would cost husband to hire a maid, a cook, a child care giver, and other domestic services traditionally supplied by a stay-at-home wife. The legislature looked at the fact that a marriage was an equal partnership, where both partners provided their best efforts to get ahead. Based on considerations like these, the legislature properly concluded that acquisition of assets was a joint effort, no matter who actually earned the money or contributed the funds to acquire the asset.

There was a fly in the ointment. The presumption of equal contribution also applied to gifts made to a child by their parent, and to inheritances. Because the law stated that the presumption of equal contribution applied to all assets acquired during the marriage, it also included gifts and inheritances. What the law ignored were the rights and interests of the parent providing the gift or inheritance. How many parents would be intending that their life’s work should go to a spouse that their child was divorcing? Nonetheless, the presumption of equal contribution caused a now-hostile spouse to receive half of the inheritance received by their spouse from his family.

The presumption of equal contribution still applies to property divisions in divorces. A year or two ago, however, the Oregon Legislature exempted from the presumption gifts or inheritances received by one of the spouses during the marriage. The law requires that the gift or inheritance be kept separate, and not co-mingled in the joint names of the parties. It can still be proved that the divorcing spouse was intended to benefit from a gift. However, the presumption has been removed, and the divorcing spouse must now prove that their in-law intended them to receive the inheritance. If it is kept separate, it is rare that an inherited asset will go to the son-in-law or daughter-in-law. The exception is when the parties put the asset into joint names.

This change in the law respects the rights of someone who had not been considered previously in divorces. That person is the parent of a divorcing child. No longer is it such a concern that the fruits of a life of labor will go to a person who is later divorced from your child.

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