Legal Question in Family Law in Oregon

Re: Family Trust vs Prenuptual

My fiance and I have been discussing prenups. I have significantly more assets than she does. We have no joint children. She is hesitant (but has agreed) to sign one. Instead, she suggested I set up a family trust to protect my assets.

QUESTION:

Would that protect my house, 401k, retirement, future inheritance, etc?

ANSWER: NO and YES. NO, given that during your lifetime you would be the beneficiary of the trust (as well a the trustee), the trust estate would be considered as property subject to the division and dispoisitional jurisdiction of the court in the event of a divorce (and subject to the same principles of equitable division that would be applied to all other marital property). NOTE: You cannot put your 401(k) and other retirement accounts into a trust (although you may be able to designate a trust as the beneficiary for any undistributed funds remaining at the time of your death. Also, a "future inheritance" is merely optimistic speculation and not a presently-existing asset. It cannot be presently placed or assigned by you to your trust.)

YES, in the event of your death while still married to your wife, a trust would preclude your surviving spouse from entitlement to any trust assets to the extent she is not included as a trust beneficiary.

QUESTION:

Or would she still be able to claim entitlement of the growth of the assets?

ANSWER:

YES, in the event of divorce, she would be able to at least assert a claim for "entitlement" to appreciation of assets that occurred during the marriage. Whether should would prevail in her claim is another question, depending on the nature of the asset, consideration of the parties' intent and treatment of the asset during the marriage, other's spouse's contribution (whether economic or otherwise) to the acquisition of the asset, and a number of other factors too numerous to detail in this limited email answer.

QUESTION:

Which is the better option to protect either of us?

ANSWER:

A prenup for your protection in the event of divorce. Supplemented by a will by you that excludes or limits your spouse as a beneficiary, coupled with your spouse signing a Waiver of Spouse's Right to Claim Statutory Elective Share of Decedent's Estate.

BOTTOM LINE: You need to consult with a estate planning lawyer on this one, and not rely on any gratuitous comments or advice given here.

LAWRENCE D. GORIN

http://www.divorcesource.com/OR/pages/ldgorin.html

Law Offices of L.D. Gorin

521 S.W. Clay St., Suite 205

Portland, Oregon 97201

Telephone: 503.224.8884

Fax: 503.226.1321

E-mail: [email protected]

Re: Family Trust vs Prenuptual

My fiance and I have been discussing prenups. I have significantly more assets than she does. We have no joint children. She is hesitant (but has agreed) to sign one. Instead, she suggested I set up a family trust to protect my assets.

QUESTION:

Would that protect my house, 401k, retirement, future inheritance, etc?

ANSWER: NO and YES. NO, given that during your lifetime you would be the beneficiary of the trust (as well a the trustee), the trust estate would be considered as property subject to the division and dispoisitional jurisdiction of the court in the event of a divorce (and subject to the same principles of equitable division that would be applied to all other marital property). NOTE: You cannot put your 401(k) and other retirement accounts into a trust (although you may be able to designate a trust as the beneficiary for any undistributed funds remaining at the time of your death. Also, a "future inheritance" is merely optimistic speculation and not a presently-existing asset. It cannot be presently placed or assigned by you to your trust.)

YES, in the event of your death while still married to your wife, a trust would preclude your surviving spouse from entitlement to any trust assets to the extent she is not included as a trust beneficiary.

QUESTION:

Or would she still be able to claim entitlement of the growth of the assets?

ANSWER:

YES, in the event of divorce, she would be able to at least assert a claim for "entitlement" to appreciation of assets that occurred during the marriage. Whether should would prevail in her claim is another question, depending on the nature of the asset, consideration of the parties' intent and treatment of the asset during the marriage, other's spouse's contribution (whether economic or otherwise) to the acquisition of the asset, and a number of other factors too numerous to detail in this limited email answer.

QUESTION:

Which is the better option to protect either of us?

ANSWER:

A prenup for your protection in the event of divorce. Supplemented by a will by you that excludes or limits your spouse as a beneficiary, coupled with your spouse signing a Waiver of Spouse's Right to Claim Statutory Elective Share of Decedent's Estate.

BOTTOM LINE: You need to consult with a estate planning lawyer on this one, and not rely on any gratuitous comments or advice given here.

LAWRENCE D. GORIN

http://www.divorcesource.com/OR/pages/ldgorin.html

Law Offices of L.D. Gorin

521 S.W. Clay St., Suite 205

Portland, Oregon 97201

Telephone: 503.224.8884

Fax: 503.226.1321

E-mail: [email protected]