Retirement accounts are marital assets that should be considered in dividing property at divorce. Most types of retirement accounts are dividable by a court order. The following is our non-exclusive list of considerations when considering how to give the non-employee spouse an interest in a retirement account:

1. Disentanglement: It is Oregon’s policy to disentangle divorcing parties. Some divisions of retirement accounts leave the parties entangled for the duration of the plan payout. Consider whether it is better to receive a lump sum in cash with no entanglement vs. a payout over time that leaves the parties entangled.
2. Risk Sharing: Some plans are inherently more risky than others.  Division  should be done in a way that makes both parties equally bear the risk of future uncertainties, such as variable dates of retirement.
3. Marital Portion: An equal division of a retirement account isn’t fair to the employed spouse if the retirement account existed for a period of time prior to the marriage. Generally, division should be based on the portion of the plan that accrued during the marriage.

If you have retirement benefits as part of your divorce case, at a minimum, you should consult with a lawyer about division considerations.

From the court’s perspective, option grants that occur during the marriage are marital assets (see our post Divorce Property Division 101.)  How options are divided can depend on when the options were granted in the course of the marriage, and what the purpose was behind the option grant. Generally, options that are granted and vest during the marriage are subject to equal division.  Options that are granted, are for the purpose of rewarding past performance,  and have not vested at the time of the divorce are generally divided using the “time rule,” giving a party a progressively smaller percentage  of options that vest farther from the divorce date.  A court may exclude from division options that are unvested at the time of the divorce and were granted for the purpose of  providing a future incentive for the employee, because there has been no contribution to the acquisition of the options by the non-receiving spouse.

For many couples option grants are a significant or the most significant asset in the marriage. The division of options can be complex, and arguments exist to include them or exclude them from the division of marital property. If your divorce case involves stock options, you shoudl consult with an experienced family law attorney. The lawyers at Stephens Margolin PC have substantial  experience assisting clients in cases involging option division.

There are a few specific issues that arise in business valuations.  There are clear standards for the business valuation process and case law specific to how businesses are valued in Oregon.  The business valuation expert can assist with the help of the lawyer to make sure that the client understands the ins and outs of the valuation process, including its value. 

The most difficult issue can be the compilation of discovery and business records relating to the business.  The valuation expert can assist the attorney and client in deciding which records are crucial so that this process can be as efficient as possible, including providing the lawyer with assistance in the deposition and trial testimony preparation phase of the case.

It is crucial that your lawyer both understands business valuation issues and assists you in choosing a highly qualified business valuation expert.  The lawyers at Stephens Margolin pride themselves on assisting clients through this process.

What is interesting about the ruling is that the judgment specifically said that the life insurance provision was for the purpose of securing both parties’ support obligations.  Neither party had a support obligation.  The Court of Appeals, none the less, found that the obligation still existed.  This case shows the long term implications of agreements reached in judgments.  It is crucial that your attorney informs you of the long term effects of your judgment and that your attorney is up to date with current case law.

The lawyers at Stephens Margolin PC strive to assist their clients in understanding the long range implications of their agreements.

There are two types of property, and courts treat them differently at the time of divorce.  The first type and largest class of property is “marital property”, which is everything the parties own, regardless of how it is titled, when it was acquired, or how the asset was handled during the marriage.

The second type is a a small class of property within the category of marital property called “marital assets.”  Martial assets are property that was acquired during the marriage.

These property definitions matter because courts apply a presumption of equal contribution to “marital assets” but not to marital property acquired before the marriage date.  People and lawyers still argue about the presumption of equal contribution and the division of marital assets, but the difference in how property is categorized can make the difference between retaining the property as a separate asset, or having the property divided by the court.

Note that divorce courts are courts of equity, and have the responsibility to work a property division that is fair, or “just and proper in all the circumstances.”  Because of this obligation to be fair, the court can and does sometimes award a premarital asset of one party to make sure a property division is fair.

If you have questions about how your property may be divided by the court in a divorce case, you should consult with an experienced family law lawyer. The lawyers of Stephens Margolin PC have extensive experience representing Oregon clients in the division of property during divorce.

1. executed voluntarily
2. Not unconscionable when it was executed and, before signing, the party
3. Was  provided a fair and reasonable disclosure of the property or financial obligations of the other party;
4. voluntarily waives in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure
5. provided; and
6. Had or could have had an adequate knowledge of the property or financial obligations of the other party.

Spousal support rights can be altered, however, if the support provisions would cause the spouse to go on public assistance, the court can order enough spousal support to prevent this from happening.

If you are contemplating a new marriage and have income or assets you wish to protect in the event of divorce, or if you are asked to sign a prenuptial agreement you should consult with a lawyer.  The lawyers at Stephens Margolin PC have substantial experience representing clients with prenuptial agreements.

The parties were married for 28 years and wife acted as a homemaker for the majority of that time.   The parties separated prior to the divorce, with wife living in California and husband living and working in Saudi Arabia.  During the term of separation, wife remained financially dependent on husband. 

The trial court valued husband’s retirement accounts as of the date of separation.  On appeal, wife argued that the proper date of valuation is the date of dissolution. 

A court has authority per ORS 107.105(1)(f) to divide all property held by either party as of the time of dissolution, and is required to divide the property in a manner that is just and proper.  Oregon law provides for two classes of marital property:  property acquired during the marriage and property acquired before the marriage.  With respect to property acquired during the marriage, there is a presumption that both spouses contributed equally to its acquisition, regardless of an intervening separation.  Due to the fact that the funds held in husband’s retirement account are from the parties’ joint marital efforts (wife’s efforts as homemaker allowing husband to work) and the fact that wife remained financially dependent on husband during the period of separation, the Court of Appeals held that the trial court should have used the date of dissolution to value the retirement accounts.

On April 14, 2010, the Oregon Court of Appeals filed an opinion in Frazier and Frazier. The entire opinion can be viewed here:  http://www.publications.ojd.state.or.us/A137220.htm

The case dealt with how to address a party’s violation of the statutory asset restraining order.  After filing for divorce, wife completed a refinance of the marital home.  The refinance violated the statutory asset restraining order.  The trial court valued her withdrawal of equity as $60,000, based upon husband’s testimony.  The trial court decided that the full amount of her benefit from the refinance should be awarded to husband out of the division of assets as an equalizing judgment.

The court of appeals held that the actual benefit to wife was only $47,000, but the trial court’s ultimate determination as to what property division is just and proper in all circumstances is a matter of discretion that the court of appeals will not disturb unless the trial court misapplied the statutory and equitable considerations that ORS 107.105 requires.  The court of appeals held that husband should receive a benefit of $47,000 out of the division of sale proceeds from the house.

The order provides for certain exceptions.  It is important to consult a lawyer when initiating a divorce proceeding or being served with divorce paperwork with regard to how the asset restraining order affects you.  Failure to consult an attorney and properly abide by the order can have harmful effects.  Also, visit the following link for a prior post by Sean Stephens on this issue:  http://oregondivorceblog.wordpress.com/2007/05/15/to-sell-or-not-to-sell/

Husband is in the military and receives BAH and BAS payments which are included in his monthly paychecks.  He argued that the court should not consider those benefits as income for child support purposes since they are non-taxable.  The court of appeals did not agree and held that pursuant to OAR 137-050-0340 which defines gross income as “income from any source including, but not limited to, salaries, wages, commissions, advances, bonuses, dividends, severance pay, pensions, interest, honoraria, trust income, annuities, return on capital, Social Security benefits, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, prizes, including lottery winnings, and alimony or separate maintenance received,” that the BAH and BAS payments were gross income.  It did not matter that those payments were non-taxable.

Husband, as a member of the military, is entitled to a military pensiion after 20 years of service.  At the time of the divorce he had not completed 20 years of service, but testified that he would complete said service.  Under Oregon law, the marital portion of husband’s pension must be calculated as a fraction of the entire actual pension, rather than as a fraction of a hypothetical pension amount.  The trial court had awarded wife a potion of the pension based upon a hypothetical retirement date prior to his full srevice.  The “time” rule is typically used to calculate the marital portion of benefits under a defined benefit retirement plan.  Under that rule, the marital portion is determined by multiplying the total actual pension benefit by a fraction, the numerator of which is the number of years (or months) of service during the marriage and the denominator of which is the total years (or months) of employment.  Wife’s interest in the pension should be based on the total pension benefit as of the date of retirement, determined either by way of an actuarial present value or through a division of benefits as they are distributed.

The court used the date of the parties’ separation to determine the marital portion of the pension.  The court of appeals held that the proper date is the date of dissolution, not the date of separation.

The court of appeals also held that in view of the fact that wife is entitled to a share of the marital portion of husband’s retirement benefits, and because those benefits would terminate if husband were to predecease her, it is appropriate that wife’s interest be protected by the provision of survivor benefits in an amount sufficient to cover wife’s share of the marital portion of the pension, with the parties to share equally in the cost of the annuity. 

The trial court ruled that husband satisfied his pretrial child and spousal support obligation via payment of the parties’ credit card debt.  Under Oregon law, a court cannot forgive a past-due support obligation.  Wife was awarded temporary spousal and child support in order to provide her with assistance in meeting her monthly expenses during the pendency of the proceeding as sset forth in ORS 107.095.  The trial court should not have credited husband’s obligation by his payment of credit card debt.

This case shows that a trial court can make myriad errors in its decisions.  In this case, the divorce was finalized by the trial court years prior to the court of appeals rendering its decision.  The issues in this case were complex.  In complex cases, the parties are frequently unable to reach a settlement due to their lawyers not being sure of a proper result.  Obviously, the alternative of throwing the issue into the hands of a trial court was not helpful in this case.  It is important to make sure that your lawyer has a firm grasp of the law and is able to property understand its application to the facts of your case and to the trial court.

The case dealt with the treatment of wife’s separately held company.  Wife was given the company by her parents prior to the marriage.  She kept the company in her sole name throughout the marriage.  Husband provided a significant amount of work for the company and the parties used the company’s income during the marriage.  The trial court ruled that husband was not entitled to a award to equalize the value of the company to wife. 

The court of appeals held the the trial court was mistaken and, that while wife had rebutted the presumption of equal contribution with regard to her initial acquisition of the property that she had not done so with respect to the company’s appreciation during the marriage.  ORS 107.105(1)(f) requires that the division of marital property be “just and proper” under the circumstances.   Marital assets are subject to a rebuttable presumption of equal contribution and ownership, which applies to property acquired by a spouse by gift during the marriage.   The appreciation in value of a separately held asset is a marital asset that is also subject to the rebuttable presumption of equal contribution.  A spouse rebuts the presumption of equal contribution with respect to the appreciation of a separately held asset if he or she proves that the other spouse did not contribute either directly or indirectly to its appreciation.  Here, wife could not rebut the presumption.

The court of appeals awarded husband one half of the appreciation of the company during the marriage.