Do I need a will if I have a trust?

Yes. Even with a living trust, you need a pour-over will to capture any assets that weren't transferred into your trust during your lifetime. Without one, those assets pass through Oregon's intestacy laws rather than according to your wishes.

What is the difference between a will and a living trust?

A will takes effect at death and must go through probate before assets are distributed. A living trust takes effect immediately, avoids probate, and allows for faster, private transfer of assets to your beneficiaries. Trusts also provide better protection for blended families and beneficiaries who are minors or have special needs.

How much does estate planning cost in Oregon?

Track Town Law offers flat-fee estate planning services in Oregon and Idaho. Fees vary based on the complexity of your plan — whether you need a simple will package, a full revocable living trust plan, or a more complex plan involving Medicaid planning or special needs considerations. Consultations are free.

Do I need an LLC for my small business in Oregon?

Most small business owners in Oregon benefit from forming an LLC. It separates your personal assets from business liabilities, can provide tax flexibility, and signals credibility to clients and vendors. The key is not just forming the LLC but setting it up correctly with an operating agreement, a dedicated bank account, and an EIN.

What does Medicaid planning involve?

Medicaid planning involves structuring your assets and income to qualify for Oregon Medicaid long-term care benefits while protecting as much of your estate as possible. This may involve Medicaid Asset Protection Trusts, spousal protection strategies, and coordinating with VA benefits if applicable. Planning works best when started at least five years before care is needed.

Can I work with Track Town Law if I don't live in Eugene?

Yes. Track Town Law is a fully virtual firm serving clients throughout Oregon and Idaho. All meetings are conducted by video or phone, and documents are signed electronically. You never need to come to an office.

What is Oregon's estate tax threshold?

Oregon imposes its own estate tax with a threshold of $1 million — significantly lower than the federal exemption of $15 million. This means many Oregon families who wouldn't owe federal estate tax may still owe Oregon estate tax. Proper planning with trusts and other strategies can reduce or eliminate this exposure.

How do I get started with Track Town Law?

Start with a free consultation. You can book online at tracktownlaw.com/book-now. Consultations are conducted by video or phone and typically last 30 to 45 minutes. There is no obligation and no charge for the initial meeting.

What Happens to Your LLC in an Oregon Divorce

Feb 13

Written By Jared Hight

How a divorce court treats your ownership interest, what your business partners are exposed to, and what your operating agreement can do about it

If you own an Oregon business and you are married, your ownership interest is property a divorce court can divide. That is true even when your spouse never worked in the business and appears nowhere in the company's records. The LLC shields you from the company's creditors, not from your own divorce.

This post covers how Oregon divides a business interest in a divorce and what can be put in place ahead of time, with particular attention to companies that have more than one owner. I handle the business side of this, meaning the operating agreement, its buy-sell provisions, and the documents a buyout requires. The divorce itself belongs with a family law attorney.

What the Oregon statute actually says

Under ORS 107.105(1)(f), an Oregon divorce court divides "the real or personal property, or both, of either or both of the parties" as is just and proper in all the circumstances. Two features of that text matter for business owners.

First, the statute reaches property of either spouse. It does not limit the court to assets acquired during the marriage, so a business you started before you married is still before the court. What changes is the starting presumption.

Second, the statute creates a rebuttable presumption that both spouses contributed equally to property acquired during the marriage, "whether such property is jointly or separately held." An LLC formed during the marriage, held entirely in your name, with your spouse nowhere on the paperwork, starts under that presumption. Property received by gift or inheritance and kept separate on a continuing basis is carved out of the presumption, which is why the history of how you acquired and held your interest can carry real weight.

A membership interest in an Oregon LLC is personal property under ORS 63.239. It falls squarely within the property ORS 107.105 reaches.

Idaho works differently

If you own an Idaho business, Idaho is a community property state, and one rule in its statute bears directly on business owners. Under Idaho Code 32-906(1), the income from separate property is community property unless the spouses have a written agreement (or the conveyance itself) providing otherwise. A business that is your separate property can still generate community income.

Usually it is the value that gets divided

Courts rarely hand an ex-spouse half of a company. The more common result is that the owner keeps the business and the other spouse receives an equivalent share of value some other way, such as a larger share of other marital assets or an equalizing judgment the owner pays over time.

If your interest is worth a meaningful amount and most of your net worth is tied up in the company, the payout has to come from somewhere. Owners in that position often have to borrow against the business or pull cash out of it to make the payment.

The number itself is usually the fight. A business does not come with a price, and valuation turns largely on earnings and on how much of the profit depends on you personally. Records matter a great deal here. If personal spending runs through the business account, or you pay yourself in ways that make profit hard to see, you are handing both sides room to argue. The discipline of a separate business bank account is ordinary good practice that becomes evidence in a divorce.

When you have business partners

This is where divorce stops being only your problem.

Suppose the divorce judgment awards part of your membership interest to your former spouse. Oregon's LLC statute treats that person as an assignee. Under ORS 63.249(3), an assignee receives the distributions and the allocations of profit and loss attached to the interest, but has no right to vote or take part in management. Under ORS 63.245(2)(b), the assignee becomes a full member only with the consent of a majority of the other members, unless the operating agreement sets a different rule.

So by default your ex-spouse will not be voting on company decisions. They will be receiving a share of the distributions, and they will have every reason to care about when distributions are made, how profit is calculated, and what the company pays its working owners. Your partners did not sign up for that relationship.

Every one of those rules applies "except as provided in the articles of organization or any operating agreement." The defaults are what you get when the owners never addressed the question. They can be replaced.

What a well-drafted operating agreement does

The LLC operating agreement is where this gets handled. Divorce belongs on the list of events the agreement addresses directly, alongside death, incapacity, and bankruptcy.

The first piece is a transfer restriction written broadly enough to cover transfers by court order, so that an interest moving under a divorce judgment is caught by the same rules as a voluntary sale. The second is a purchase right triggered by that event, giving the company or the remaining members the option to buy the transferred interest back. That right only works if the agreement also sets a valuation method and payment terms in advance, so that the price is not being invented in the middle of a divorce. Those mechanics are the same ones I cover in buy-sell agreements, and the logic is the same one that governs what happens when an LLC owner dies: an interest leaving a member's hands for reasons the company did not choose.

Some agreements also ask each member's spouse to sign a short consent acknowledging the transfer restrictions and purchase rights. The spouse is not made a member by signing. The point is that they knew the terms before anyone needed them.

If your company has two or more owners and the operating agreement is silent on divorce, or there is no written agreement at all, that is worth fixing now, while every owner's household is stable. How the ownership is structured in the first place also matters, and I cover that in multi-member LLC structure.

Premarital and marital agreements

Oregon's premarital agreement statute, ORS 108.710, expressly allows couples to contract over the disposition of property on dissolution, which includes a business interest. Agreements made during the marriage are also used for this purpose. Either kind is family law work, and each spouse should have their own attorney for it. The operating agreement and the marital agreement work best when they are drafted to fit each other, and I am glad to coordinate with the family law attorney on the business terms.

After the divorce

When a divorce settles with one spouse buying out the other's share of a business, the company still has to carry out that result. Depending on the structure, that may mean a redemption agreement or an assignment, usually paired with an amended operating agreement. That transactional work is something I handle once the divorce terms are set.

Bottom Line

In Oregon, your business interest is part of what a divorce court can divide, and an LLC formed during the marriage starts with a presumption that your spouse contributed equally to it. In a company with partners, the statutory defaults can leave an ex-spouse holding an economic stake in a business they have no role in. A written operating agreement that restricts transfers and gives the company a divorce-triggered purchase right at a price set in advance replaces those defaults with terms the owners chose.

I serve business owners throughout Oregon and Idaho. Book a free consultation here.

This post is general information about Oregon and Idaho law and is not legal advice for your situation. Reading it does not create an attorney-client relationship.

Jared Hight https://www.tracktownlaw.com