Chapter 285 Oregon Laws 2005

AN ACT

HB 2978

Relating to division of assets of spouses in domestic relations proceeding.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 to 6 of this 2005 Act are added to and made a part of ORS chapter 107.

SECTION 2. As used in sections 2 to 6 of this 2005 Act:

(1) “Designation of beneficiary” means the naming of a person in a governing instrument for the purpose of a transfer of moneys or other benefits upon the death of the principal.

(2) “Governing instrument” means a policy of life insurance executed by a principal before a suit for marital dissolution, separation or annulment or a document executed by the principal before a suit for marital dissolution, separation or annulment for the purpose of designating a beneficiary under:

(a) An employee pension benefit plan, as defined in 29 U.S.C. 1002 (2) for the purposes of the Employee Retirement Income Security Act of 1974;

(b) A public retirement system of a public body, as defined in ORS 174.109, or of any other state or local government;

(c) A federal retirement system created by the federal government for any officer or employee of the United States, including any person retired from service in the United States Civil Service, the Armed Forces of the United States or any agency or subdivision thereof;

(d) A deferred compensation plan under section 457 of the Internal Revenue Code;

(e) An individual retirement account, annuity or trust or simplified employee pension under section 408 or 408A of the Internal Revenue Code;

(f) An employee annuity, including custodial accounts treated as annuities, under section 403(a) or (b) of the Internal Revenue Code; or

(g) A retirement account, stock certificate, mutual fund account, bank account or other financial account that is not jointly owned by the principal and the principal’s spouse and that is payable or transferable upon the death of the principal.

(3) “Principal” means the person who designates a beneficiary in a governing instrument and who is a party to a suit for marital dissolution, separation or annulment.

(4) “Relative of the spouse” means a person who is related to a spouse by blood, adoption or marriage and who is not related to the principal by blood, adoption or marriage.

(5) “Spouse” means a person who is or was married to the principal.

SECTION 3. (1) A judgment of dissolution, separation or annulment may revoke a designation of beneficiary made by a principal in favor of a spouse or a relative of the spouse if the designation of beneficiary is revocable as described in subsection (2) of this section.

(2) A designation of beneficiary is revocable for the purposes of this section if the principal at the time of the judgment may, by law or under the terms of the instrument, cancel or change the designation of beneficiary.

(3) A designation of beneficiary is revocable for the purposes of this section without regard to whether the principal is:

(a) Competent at the time of the entry of judgment; or

(b) Able to designate the principal in place of the spouse or in place of the relative of the spouse.

(4) The revocation of a designation of beneficiary under this section becomes effective upon entry of the judgment.

SECTION 4. If a designation of beneficiary is revoked under section 3 of this 2005 Act, the designation of beneficiary must be given effect as if the spouse or the relative of the spouse had predeceased the principal.

SECTION 5. (1) A person is not liable for having made a payment to a beneficiary designated in a governing instrument, or for having taken any other action in good-faith reliance on the governing instrument, unless the person has received written notice of the revocation of designation of beneficiary under section 3 of this 2005 Act.

(2) Written notice of the revocation under this section shall be mailed to the home or office of the person by regular United States mail or be given by a means designed to provide the person with notice of the revocation.

(3) Upon receipt of written notice of the revocation under this section, a person may pay the amount owed under a governing instrument to any court in which probate proceedings for the estate of the principal are pending. If probate proceedings for the estate of the principal have not been commenced, the person may pay the amount to the circuit court for the county in which the principal resided at the time of death. The court shall hold the funds and shall order disbursement in accordance with the court’s determination of the effect on the judgment of dissolution, separation or annulment. Payments made to the court under this section discharge the person making the payment from all claims for the amount paid to the court.

SECTION 6. In addition to the revocation of designation of beneficiary under section 3 of this 2005 Act, a judgment of dissolution, separation or annulment may require conveyance or release of contingent or expectant interests, including right of survivorship, that are necessary to effectuate a division of assets between the principal and the spouse in the marital dissolution, separation or annulment.

SECTION 7. Sections 2 to 6 of this 2005 Act apply to judgments entered on or after the effective date of this 2005 Act.

Approved by the Governor June 20, 2005

Filed in the office of Secretary of State June 21, 2005

Effective date January 1, 2006

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