What Are Gifts and Inheritance Laws in Oregon?
A topic that often arises when talking to our clients surrounds the issue of inheritance and divorce settlement. If one spouse has received an inheritance during the course of the marriage, they often wonder if a spouse is entitled to inheritance money after the dissolution of the marriage.
In 2011, the Oregon Legislature modified laws to remove assets “acquired by gift to one party” that were kept separate “on a continuing basis” from presumption of equal contribution, even if the gift or inheritance was received during the marriage.
Before 2011, during a divorce in Oregon, it was presumed that inheritance that was accumulated during the marriage would be divided, because the court assumed there was an equal contribution from both spouses. This means that each spouse contributed equally during the marriage, and should therefore be entitled to an equal share of the inheritance upon divorce. However, after the change to the law in 2011, a spouse can now rebut the presumption of equal contribution with regards to gifts or inheritance they have received during the marriage.
Background of the Gifts and Inheritance Laws in Oregon
There have been some interesting cases surrounding divorce in Oregon in the lead up to the change in legislation. The change was brought about in response to the court of appeals decision in the case In re Marriage of Olesberg (2006). In this case, The Olesbergs had been married for 27 years when they decided to dissolve their marriage. Shortly before the separated in 2001, the husband’s mother died. The husband inherited $65,000 from his mother, which was held in a separate bank account from the marital assets.
While the court found that the wife had not contributed to the acquisition of the inheritance, as it was simply a division of the mother’s assets among her three children, the court still applied the presumption of equal contribution. It was this ruling that led to the change in the law, as the wife in this case clearly made no contribution to the inheritance, and it was kept separate from the marital assets at all times.
Another interesting case in the build up to the changes of the gifts and inheritance Laws in Oregon is In re Marriage of Gardner, (2007), where the court saw things slightly different than the Olesberg case, finding that Olesberg “involved a 25-year marriage and a corresponding length of relationship between the non-recipient spouse and the donor.”
However, the Gardner case was a little trickier. The parties were married in 1993. The wife’s mother made a gift to the wife in 1997 in the form of a $400,000 check that was made out solely to the wife. The wife deposited the check into a bank account held in her name alone. Subsequently, the wife used $371,935 of her mother’s gift to purchase house, which became the couple’s marital residence. The house also became the permanent residence of the wife’s mother, who the wife had agreed to care for. The property was titled solely in the wife’s name.
Even though the couple lived together in the house from 1998 until the marriage dissolution in 2005, the court upheld that the husband was not entitled to an equitable share of the property, as it had been purchased with the mother’s gift to the wife. The husband had contributed labor throughout the years he lived in the house, however the court deemed that this was not enough to entitle him to a full division of the house. His labor, however, did result in the house appreciating in value by $70,816, and the court ruled that the husband was entitled to half of the appreciation amount.
What does this mean for you?
Does inheritance have to be shared with a spouse after a divorce? After the 2011 legislation changes, if you have received a gift during the course of your marriage, or received an inheritance, it could be possible to keep this separate from being divided with your spouse during divorce proceedings.
Following the 2011 law changes, you should ask yourself the following four questions to determine if the changes apply to your situation:
- Did you acquire and asset in the form of a gift? A gift can be defined as to include acquired assets by “gift, devise, bequest, operation of law, beneficiary designation or inheritance.”
- Was the asset acquired as a gift solely to one party?
- Was the asset kept separate from other assets upon receipt?
- Was the asset kept separate continually thereafter?
If you answer yes to these questions, it could be possible to keep the value of the gift or inheritance separate from the marital assets considered during divorce proceedings.
However, it will still be down to the court to rule whether or not the asset is considered to have been attained through equal contribution from both parties, as while there is not a presumption that these assets received via gift or inheritance belong to both parties, the court still has authority to divide these assets between the parties, based on what is just and proper in each case.
If you have received a gift or inheritance during your marriage, and the marriage is now being dissolved, you must work closely with your attorney to establish all the facts prior to the case being heard in court. In many instances, the winning or losing of these types of cases can be in calling the right witnesses and by asking the right questions.
Although nothing in this FAQ should be considered legal advice, if you would like to have a confidential discussion regarding gifts or inheritance you may have received during your marriage, please do not hesitate to contact us. Our team of top divorce attorneys in Oregon are experienced in all areas of marital law, so you have peace of mind that you are in good hands.