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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Odom v. Odom (08/11/2006) sp-6034
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| WILLIAM L. ODOM, | ) |
| ) Supreme Court Nos. S- 11905/11925 | |
| Appellant/ | ) |
| Cross-Appellee, | ) Superior Court No. |
| ) 3AN-03-05181 CI | |
| v. | ) |
| ) O P I N I O N | |
| CAREY P. ODOM, | ) |
| ) No. 6034 - August 11, 2006 | |
| Appellee/ | ) |
| Cross-Appellant. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Mark Rindner, Judge.
Appearances: Bruce A. Bookman, Bookman &
Helm, Anchorage, for Appellant and Cross-
Appellee. Peter J. Maassen, Ingaldson,
Maassen & Fitzgerald, P.C., Anchorage, for
Appellee and Cross-Appellant.
Before: Bryner, Chief Justice, Matthews,
Fabe, and Carpeneti, Justices. [Eastaugh,
Justice, not participating.]
FABE, Justice.
I. INTRODUCTION
These cross-appeals arise from a judgment concerning
custody and dividing property in a divorce proceeding. William
(Bill) Odom challenges as excessive the amount by which his
separate estate was invaded as well as the award of primary
physical custody of the children and the ancestral home to his
former wife, Carey Odom. Carey cross-appeals the
characterization of Bills interests in his family company as
separate property and also challenges as inadequate the amount by
which Bills separate property was invaded. Because the superior
court did not abuse its discretion in determining custody or in
awarding the ancestral home, we affirm both decisions. Because
Carey did not meet her burden of showing that Bills separate
interests had become marital property, we affirm that decision.
But because the invasion of Bills separate property in the amount
of $2,250,000 was erroneous, we vacate that determination and
remand for further proceedings.
II. FACTS AND PROCEEDINGS
Bill and Carey Odom were married on June 16, 1990 and
have two children, Brittany, born in 1994, and Hilary, born in
1997. The parties separated in May 2002. The superior court
issued its findings of fact and conclusions of law, decree of
divorce, and child custody order on February 22, 2005. Bill
filed a motion to reconsider, which was granted in part and
denied in part.1 This appeal and cross-appeal followed.
A. The Custody Order
Bill and Carey were awarded joint legal custody. Bill
was also required to pay child support of $2,500 monthly, all
private school expenses, and the childrens health insurance.
Bill does not appeal these rulings and challenges only the
physical custody order. The superior court had issued an interim
order whereby Carey was awarded primary physical custody on
weekdays during the school year, with Bill having weekend,
holiday, and extended summer visitation rights. At the trial,
Carey sought to have this interim order made permanent while Bill
sought joint physical custody in the form of a two-week-on, two-
week-off schedule.
The superior court awarded Carey primary physical
custody and provided Bill visitation with the children three
weekends per month (from Friday after school to Sunday evening or
to school on Monday morning as the parties may agree), alternate
Thanksgivings, shared Christmas vacations, and Fathers Day. In
addition, he was allowed a three-week block of time during the
summer. Additional visitation could be arranged as agreed upon
jointly by Bill and Carey. Bill appeals the award of primary
physical custody to Carey.
B. The Award of the Anchorage Home
Bill appeals the award of the Odom family home in
Anchorage to Carey. Because it was his family home, Bill had
repeatedly requested that he be awarded the Anchorage home during
trial. But the superior court awarded the Anchorage house to
Carey because she had been awarded primary physical custody of
the children. The superior court took notice of the fact that
Bill had a substantial attachment to the home and therefore
awarded Bill the right of first refusal to purchase the home
should Carey predecease Bill or choose to sell the house. Bill
appeals the award of the Anchorage house to Carey.
C. The Property Division
A primary issue at trial was whether Bills interests in
Odom Enterprises2 had become part of the marital estate. The
superior court found that Bills interests were separate property
but determined that an equitable distribution demanded that it be
invaded. This invasion raised the question of the extent to
which Bills separate estate was to be invaded.
Bills interests in Odom Enterprises include interests
in the Odom Company as well as in two related partnerships. The
Odom Company was founded by Bills father, Milt Odom. Milt Odom
died in 1988, before Bill and Careys marriage. At the time of
Milt Odoms death, Bill owned 7% of the Odom Company shares and
that amount had decreased to 5.6% by the time of trial. Bills
5.6% holding would be worth $1,139,062 based on the price of $116
per share, a value presented by Bills experts to the superior
court. In addition, Milt Odoms estate is expected at some future
date to distribute Milt Odoms share of the company to each of the
three Odom brothers; Bill will then own approximately one-third
of the company. That distribution is not likely to occur for
another eight years due to tax issues.
Bill also owns a one-third interest in two partnerships
that are related to the Odom Company: the Odom Brothers
Partnership and the Odom Real Estate Partnership. The first
partnership was created in 1994 by the Odom Company as part of
its business plan and was neither Bills idea nor managed by Bill.
The second partnership was created in 1989, before Bill and
Careys marriage. Bills shares in the two partnerships were
valued at $84,760 and $477,984, respectively.
The superior court estimated that the value of Bills
interests in Odom Enterprises, including his undistributed
inheritance, totals at least $6.3 million and may be worth as
much as $8.6 million. Because Bills interests were inherited
before the marriage, or created using entirely premarital assets,
they were presumptively unavailable for distribution in the
divorce. There is no dispute that Bills undistributed
inheritance from his fathers estate is separate property. But
Carey argued in the trial below that Bills interests in the Odom
Company and partnerships had become part of the marital estate as
a result of the doctrines of either active appreciation or
transmutation. The superior court found that neither doctrine
applied and that Bills interests had not become part of the
marital estate.
In its distribution of the marital estate, the superior
court awarded Bill approximately $57,000 more than Carey. In
making the division, the superior court found that the Odoms
lifestyle had been one of unusual opulence and privilege and
commented that the value of the estate was relatively small due
to deliberate choices made by Bill and his brothers whereby Odom
Company assets were used to pay substantial household expenses.
The superior court also noted that Bills separate property has
considerable income generating capacity while there is no
likelihood that [Carey] would ever be able to generate an income
level that even remotely resembles the manner of lifestyle [to]
which she and the children have been accustomed.
The superior court therefore proceeded to examine the
Merrill factors codified in AS 25.24.160 and determined that in
order to balance the equities it must invade Bills separate
property as allowed under AS 25.24.160(a)(4). Bill was ordered
to pay $2,250,000 to Carey within one year of the superior courts
order (dated February 22, 2005) and to pay $8,000 a month in
spousal support to Carey until that sum was paid. The superior
court recognized that Bills obligations might impose a hardship
in terms of cash flow but found that Bill had the ability to
obtain loans or sell his interests in order to make the payments
and, furthermore, that if Bill were to suffer hardship, he must
bear the brunt of those problems as they result from the
decisions that [he] and his brothers have made as to how the
assets of their various enterprises would be used.
Bill appeals as excessive the amount by which his
separate property was invaded, as well as the finding that he had
the ability to pay a lump sum amount of $2.25 million. In her
cross-appeal, Carey disputes the characterization of Bills
interests as separate property and, in the alternative,
challenges as inadequate the amount by which the separate estate
was invaded.
III. STANDARD OF REVIEW
The division of the marital estate requires first that
property owned by the parties be characterized as separate or
marital, that the marital property then be valued, and finally
that the marital property be allocated equitably.3 The
characterization of property as separate or marital may involve
both legal and factual questions.4 Legal questions are reviewed
de novo5 and in so doing we adopt the rule of law that is most
persuasive in light of precedent, reason, and policy.6 We review
findings of fact under the clearly erroneous standard.7
We review the distribution of property under the abuse
of discretion standard and will reverse that distribution if it
is clearly unjust.8 The equal division of the marital estate is
presumptively valid.9 Whether or not the equities require
invasion of premarital assets is reviewed for abuse of
discretion.10 We review de novo whether the trial court applied
the correct legal rule in exercising its discretion.11
The superior court has broad discretion in child
custody decisions.12 A trial courts determination of custody will
be set aside only if the entire record demonstrates that the
controlling findings of fact are clearly erroneous or that the
trial court abused its discretion.13 Findings of fact are set
aside if a review of the entire record firmly convinces us that a
mistake has been made.14 We find an abuse of discretion if the
trial court considered improper factors in making its custody
determination, failed to consider statutorily mandated factors,
or assigned disproportionate weight to particular factors while
ignoring others.15
IV. DISCUSSION
A. The Custody Award
Although Bill sought equal physical custody of his and
Careys two children and asked for a schedule of two weeks on and
two weeks off, the superior court awarded primary physical
custody to Carey. Bill was awarded three weekends each month,
alternate holidays with shared Christmas vacations, and three
weeks in the summer. Bill disputes the factual findings made by
the superior court and appeals the award of primary physical
custody to Carey. Because the custody award was within the
discretion of the superior court, we affirm.
The superior court relied on the fact that Carey had
been the childrens primary caregiver on a full-time basis and was
an excellent mother. The superior court additionally found that
Bill tends to place his own needs and interests above those of
the girls. Bill disputes these findings. Bill also complains
that the final custody arrangement awarded him even less
visitation with the children than had the interim custody
arrangement because it provided for only three, rather than all,
weekends per month with the children.
Custody determinations are to be made based on the best
interests of the child. Alaska Statute 25.24.150(c) provides a
list of factors to be considered in determining the childrens
best interests. The superior court may properly conclude that
awarding custody to the primary caregiver will establish greater
emotional stability for the purposes of AS 25.24.150(c)(5), which
requires the court to consider the length of time the child has
lived in a stable, satisfactory environment and the desirability
of maintaining continuity.16 Additionally, there are many reasons
why the childrens best interests might require one weekend a
month to be spent with their mother. It is the function of the
superior court to judge witness credibility and to weigh
conflicting evidence.17 Because the superior court did not abuse
its discretion, we affirm the award of physical custody to Carey
and the visitation schedule.
B. The Award of the Anchorage House
At trial, Bill sought to be awarded the Anchorage home
which belonged to his father and was where he was born and
raised. The home contains many Odom family heirlooms.18 To help
Carey find a new home, Bill had proposed that she be given six
months to locate another home (financed in part by Bill). But
the superior court awarded the home and its contents to Carey
because it had awarded Carey primary physical custody of the
children. Because that award was not an abuse of discretion, we
affirm.
Bill attacks the superior courts reasoning on several
grounds. First, he addresses the link that the superior court
made between the award of custody and the award of the Anchorage
home. Bill argues that if the award of the home was based on the
custody decision, then Carey should have been required to sell
the house to Bill once the children left home. Second, Bill
argues that custody decisions by themselves should not determine
property division decisions.
But both of these arguments have little merit. Alaska
Statute 25.24.160(a)(4)(F) directs the superior court to consider
the desirability of awarding the family home, or the right to
live in it for a reasonable period of time, to the party who has
primary physical custody of [the] children. It is well within
the broad discretion of the superior court to determine how a
marital asset should be allocated at trial.19 The superior court
noted that the children had lived in the Anchorage home their
entire lives. And the trial court recognized Bills attachment to
the home by awarding him a right of first refusal to purchase it
should Carey predecease him, or should she choose to sell it
during her lifetime. Because it was well within the superior
courts discretion to award the family home to Carey, we affirm on
this issue.
C. The Characterization of Odom Enterprises as Bills
Separate Property
The characterization of property owned by the parties
to a divorce as marital or separate is the essential first step
in the equitable division of property. Therefore, we examine the
merits of Careys challenge to the superior courts determination
that Bills interests in Odom Enterprises were separate before
addressing Bill and Careys appeals of the amount by which that
separate property was invaded.
1. The superior court did not err in its
characterization of Bills interests in Odom
Enterprises as separate property.
The superior court found that Bills interests in both
the Odom Company and the partnerships were separate property.
Carey appeals that determination and argues that Bills interests
became marital property under the doctrines of either
transmutation or active appreciation.
a. Transmutation
Transmutation occurs when married parties intend to
make a spouses separate property marital and their conduct during
marriage demonstrates that intent.20 The central issue in
determining transmutation is the intent of the owner of the
separate property, as demonstrated through . . . words and
actions.21 If transmutation is found, the property becomes
entirely marital.22 In this case, the superior court determined
that the doctrine of transmutation was inapplicable to Bills
assets. Carey argues that Bills interests in both the company
and the partnerships became marital assets through transmutation
in two ways: (1) the untraceable commingling of assets23 and (2)
the treatment of the asset as a joint holding.24 We disagree and
uphold the superior courts conclusion that Bills interests in the
company and partnerships did not become marital through
transmutation.
Carey first argues that Bills separate assets became
marital through transmutation as a result of commingling. Her
argument is essentially that because Bill used his company
account as the main checking account to pay bills for the
marriage, the company account transmuted into marital property.
But it is well established in Alaska that the mere commingling of
separate property with marital property does not lead to a
finding of transmutation.25 Using part of a premarital account
for a marital purpose does not change the balance of the
[premarital] account into marital property so long as no new
contributions of marital funds to the [premarital] account are
made.26 Thus, while Bills payment of money for marital bills out
of his separate account converts the money actually used into
marital property, it does not, without more, convert the entire
separate account into marital property.
Careys second argument relies on the joint holding
theory of transmutation. Separate property can become marital if
the parties, by their actions during marriage, demonstrate their
intention to treat [separate] property as joint holdings.27 Carey
alleges that Bills intent to make his interests in the Odom
Company marital is evidenced by the fact that Bill and Careys
marital finances were enhanced in large part by perquisites
supplied by Odom Enterprises in the form of paying the bills for
vacation residences, travel, and transportation, as well as for
housekeepers, the cars fuel and insurance costs, and the
maintenance and painting of houses. As Carey put it, every
aspect of the Odoms opulent and privileged marital life was
supported, in whole or substantial part, by the Odom
[E]nterprises money. She claims that the support of Odom
Enterprises of the marital life was pervasive to the extent that
the line between separate and marital property [became] so thin
as to be substantively meaningless.
But when determining whether separate property has
transmuted into marital property, we have previously determined
that the mere use of an assets proceeds for marital purposes is
insufficient.28 In affirming findings of transmutation, we have
taken into account the active involvement of both parties in the
ongoing maintenance, management and control of the property;29 a
pooling of both parties time, talents, and any premarital assets
that they had into the joint holding;30 or a showing that the
owner-spouse made no attempts to maintain the separate character
of this property.31
But in this case, there is no evidence beyond mere use
of the assets proceeds to fund marital activities to support a
joint holding theory of transmutation. Carey did not maintain or
manage Bills separate property. Careys name was not on any of
the companys bank accounts; her credit was not used for any bank
loans; and she never held any Odom stock. Carey was not involved
in planning the details of company business and conceded that she
played no role in the management of the company or the
partnerships. Finally, Carey was aware that the Odom brothers
did not want their wives working in the business or to have
ownership interests in the shares owned by the brothers. These
factors together indicate not only that Carey did not maintain or
manage the separate property but also that Bill intended and made
active efforts to ensure that his property remained separate.32
Because the mere use of a separate asset for marital purposes
cannot transform the separate asset into a marital asset, Careys
transmutation argument fails.
b. Active appreciation
Active appreciation occurs when marital funds or
marital efforts cause a spouses separate property to increase in
value during the marriage.33 Under this theory, any increase in
value of Bills separate interests subsequent to the date of
marriage is treated as marital property to the extent that the
increase results from active marital conduct: Appreciation in
separate property is marital if it was caused by marital funds or
marital efforts; otherwise it remains separate. 34 For this
doctrine to apply, there must be (1) appreciation of separate
property during marriage; (2) marital contributions to the
property; and (3) a causal connection between the marital
contributions and at least some part of the appreciation.35 Carey
bears the burden on the first two elements36 and Bill bears the
burden of proving the absence of a causal link between his
efforts and any appreciation in value of his separate property
during marriage.37
In determining whether active appreciation applies to
Bills interests, a distinction must be made between Bills
interests in the Odom Company and those in the related
partnerships. With regard to the Odom Company, the superior
court found that it had not increased in value during the
marriage and, therefore, the doctrine of active appreciation did
not apply. As for the partnerships, the doctrine was found not
to apply for two reasons: first, because any increase in value in
the partnerships was passive, and second, because no marital
contribution was made to the property.
i. The Odom Company
We first discuss Bills interests in the Odom Company.
The superior court did not reach the second and third elements of
the doctrine of active appreciation because it found that the
Odom Company had not increased in value during the marriage. At
trial, Bill presented evidence from two experts to explain that
the Odom Company, and by extension his interests in the company,
had not increased in value. Although she bore the burden of
proof and was aware that the valuation of assets would be an
issue in the division of assets upon divorce, Carey presented no
experts to counter the testimony of Bills experts at trial. And
although Carey claims that her cross-examination of Bills experts
was sufficient to impeach their testimony, the trial court did
not find her evidence to be credible. Carey now challenges the
superior courts application of the doctrine of active
appreciation. In the alternative, she disputes the findings of
Bills experts and points to other economic indicia to claim that
the Odom Company did increase in value. Because the superior
court was correct in its application of the doctrine of active
appreciation, we affirm the superior courts finding that the Odom
Company did not increase in value.
Careys first approach is to challenge the superior
courts interpretation of the doctrine of active appreciation.
She makes two arguments: (1) that inflation should not be taken
into account when determining whether an asset has appreciated in
value; and (2) that any asset that is actively managed satisfies
the active appreciation test whether or not it has increased in
value. Neither claim is in accord with our decisions in this
area.
First, Carey argues that adjustments for inflation or
other passive economic factors should not be taken into account
when determining the value of an asset. Instead, she argues that
the proper test is fair market value. Thus, an asset worth $80
ten years ago and $116 today should be considered to have
appreciated by $36.38 But this argument is not in accord with our
practice, which is to take into account inflation and purchasing
power of the dollar. In Brooks v. Brooks, for example, we
defined passive appreciation as appreciation that occurs without
any significant contribution being made toward that increase by
either spouse (i.e. inflation or other economic factors beyond
the spouses control).39
Careys second argument, that any asset that is actively
managed satisfies the active appreciation test, whether or not it
has increased in value, is also not in accord with Alaska law.
Carey argues that the superior court misunderstood the doctrine
of active appreciation because it is the causal element, rather
than value, that ought to be key to the discussion. In essence,
Carey argues that the fact that the share price of the Odom
Company fluctuated over time or did not fall even further in
value by the time of separation is due to the active efforts of
Bill and his brothers. Carey cites to Brooks40 for the
proposition that passive appreciation can only occur in the
absence of any active marital efforts. Under her theory, the
only way for there not to have been active appreciation in an
asset, whether or not the asset had objectively increased in
value, would be for the asset to sit idle for the duration of the
marriage.
But Careys approach conflates the elements of the test
for active appreciation and misreads Brooks. The test requires
that the value of the asset have actually increased before the
discussion may turn to whether that increase was due to active or
passive forces. In Brooks, for example, the fact that the asset
had increased in value had already been determined41 and we were
concerned with determining whether the appreciation in value was
due to passive forces or to active efforts on the part of the
spouse.42 Most recently, in Hanson v. Hanson, we made it clear
that the trial court must first determine whether the asset
increased in value before proceeding with the other elements.43
This approach is in accord with decisions from other
jurisdictions, which also require that it first be determined
whether the asset increased in value before moving to the other
parts of the test.44
The doctrine of active appreciation cannot take into
account the fluctuations of an assets value through time. Turner
illustrates this principle when he notes that if a $100,000
business increases in value to $150,000 during the marriage
because of active efforts, but then drops back in value to
$100,000 by the time of separation due to market forces, then
there is simply no marital interest to divide.45 Turner does not
suggest that marital contributions be parsed such that an
increase in one year be compared to a decrease in another or
examined as to whether they stopped the business from further
plummeting in value. In Foster v. Foster, we acknowledged that
the spouse had made improvements to the property.46 But because
those improvements were all in a state of disrepair by the time
of trial, there was no evidence that his efforts had added to the
fair market value of the property, and we thus affirmed the trial
courts denial of an award based on the value of the work he
performed.47 In valuing assets upon divorce, it is a settled
principle that the asset is valued on a date certain, even if the
vagaries of market forces might cause the value of the asset to
be unusually high or low on that date.48 Therefore, Careys attempt
to dispute the superior courts rejection of the applicability of
the doctrine of active appreciation must fail.
In the alternative, Carey challenges Bills experts
determination that Bills interests in the Odom Company had not
increased in value. At trial, Bill presented the testimony of
Dr. Richard Parks, who qualified as an expert economist and who
compared the value of the shares of the Odom Company at the time
of marriage to that at the time of separation. The initial share
price was an average of a price of $80 used in a minority
redemption transaction in 1990 and a price of $89.64 used in a
buy-out of the fourth Odom brother in 1992.49 The final share
price of $116 was based on valuation undertaken by the companys
independent advisor, T.S. Leung, on March 31, 2002 (the Leung
Report).50 Dr. Parkss comparison found no real increase in the
value of the company and determined instead that the company had
failed to keep pace with inflation and had far underperformed as
compared to several industry and stock market standards. The
Odom Company lost money in 1998, 1999, 2000, and 2001. Bill also
presented the testimony of Ronald Greisen, who was qualified as
an expert, to explain to the court issues of federal taxation,
accounting, and business valuation.
Carey now claims that it was error for the superior
court to rely on the $116 share price in its findings because the
Leung Report should be considered inadmissible hearsay. But no
objection on this basis was raised at trial. And even if
hearsay, the report could be used as a basis for expert opinion.51
Moreover, the superior court did not itself use that number but
merely referred to it when describing the process by which Bills
expert valued the company. Carey also argues that she disputed
the price of $116 by showing that the book value of the shares
was listed as $158 per share. But she did not call a witness to
explain why book value should indicate fair market value.
Instead, Bills expert repeatedly explained that the accounting
entry of historical book value had nothing to do with the fair
market value of [Bills] minority and unmarketable shares of the
Company. Carey offered no other evidence as to the connection
between book value and fair market value to contradict Bills
expert. Therefore, the superior court had no evidentiary basis
for selecting the method which [the expert] had rejected.52
In the alternative, Carey argues that certain facts
that were before the superior court are in themselves prima facie
indicators of an increase in value. She points particularly to
the increase in Bills income during the marriage and the increase
in the Odom Companys gross revenues.53 But the cases relied upon
by Carey do not support her contention that these facts, standing
alone, are sufficient to require a finding of appreciation in
value.54
For example, in Harrower v. Harrower, it was only
because neither party presented any evidence of asset value that
we concluded it was reasonable to infer that stock would
appreciate over a period of thirty years.55 But in this case,
evidence of the value of Bills interests in the Odom Company was
squarely before the court and both of Bills experts were
qualified as experts by the superior court. And in Schmitz v.
Schmitz, we used the fact that the revenue of the separate
business increased during the period of marriage to infer that
the value of the business may have increased during the marriage,56
but we did so because the financially disadvantaged spouse
claimed that she was financially unable to hire an expert due to
inequitable conduct on the part of her former husband and,
moreover, because she had alerted the superior court to her
predicament prior to trial.57 In this case, in contrast, there is
no evidence that Bill obstructed Careys attempts to value the
Odom Company. Bill provided Carey with documents pertaining to
the companys finances as well as a summary of asset values. But
she did not ask for a continuance to develop a valuation of the
Odom Company. Although Carey argues now that she did not have
the financial wherewithal to present evidence of asset values,
there is no evidence in the record that Carey requested extra
attorneys fees to pay for an independent valuation of the company
or other assets owned by Bill.58 Instead, there is evidence that
Bill paid for Careys attorneys fees.
In sum, it was Careys responsibility to bring forth
evidence to show that Bill was wilfully obstructing her access to
company documents or to request aid in the event that the cost of
an appraiser was too heavy for her to bear. But the superior
court found that Carey upon whom the burden of proof fell,
offered no competent evidence as to the fair market value of
Bills interests in the company. We have held that it is the duty
of the parties, not the court, to ensure that all necessary
evidence is presented at trial in divorce proceedings and that a
party who fails to present sufficient evidence may not later
challenge the adequacy of the evidence on appeal.59
ii. The related partnerships
We now turn to a discussion of Bills interests in the
related partnerships. The superior court found that the doctrine
of active appreciation did not apply to the partnerships for two
reasons: (1) because the partnerships had not actively
appreciated in value and (2) because neither Bill nor Carey made
marital contributions to the property. No evidence of the
partnerships value was presented before the court by either
party. The superior court found that while the evidence is not
sufficient for the Court to determine if these assets have
appreciated, the evidence is quite clear that if there were such
appreciation it would be passive, rather than active. In short,
rather than requiring that the assets be separately appraised,
the superior court relied on Bills experts view that any
appreciation in value was passive.
We have remanded for further findings when an assets
value was not first determined. For example, in Foster v.
Foster, we stated that it was error for the superior court not to
value the allotment of native land that was the wifes separate
property because that valuation should be taken into account when
assessing the relative economic positions of the parties.60 But
in Foster, no evidence of the propertys value was before the
court, and it was in the light of that paucity of information
that we determined it was clear error for the superior court to
decide that the property value was negligible.61 In this case,
although the superior court did not have evidence of the actual
value of either partnership before it, it did have testimony to
the effect that if there had been an increase in the value of the
partnerships, it quite clear[ly] would have been entirely passive
in form. On appeal, Carey now asserts that the evidence of
appreciation cannot be reasonably disputed, but every example she
offers is an example of passive appreciation rather than active
appreciation.62 As previously noted, Carey had the burden of
proof on this issue, yet she failed to offer her own experts at
trial or attempt to appraise the separate assets of the
partnerships.63
Furthermore, the second finding made by the superior
court, that no marital contributions were made to the
partnerships, is sufficient on its own to counter the active
appreciation argument.64 The superior court found that the
partnerships were not a result of Bills plans or ideas and that
he did not work on them as part of the business. The
partnerships are run instead by Odom Enterprisess managers as
part of the company assets. Although it was her burden, Carey
did not offer any evidence at trial that Bill managed or ran the
partnerships during the marriage.
In sum, Carey failed to meet her burden of showing that
there had been an increase in value of either Odom Company or the
partnership or that any appreciation would have been active.
Thus, the superior court did not err in its determination that
Odom Company and the partnership were Bills separate property.
D. The Equitable Division of the Marital Estate and
Invasion of Bills Separate Property
Bill challenges the division of the marital estate and
the invasion of his separate property. Both Bill and Carey
appeal the amount by which the superior court invaded Bills
separate property as being arbitrary. Bill additionally argues
that the lump sum form of the required payment of $2.25 million
imposed upon him an impermissible hardship. We agree that it was
error to invade the separate estate without first determining
whether an unequal division of the marital estate would properly
balance the equities between Bill and Carey. We therefore remand
for a re-examination of the division of the marital estate.
The division of marital property in a divorce is a
matter of discretion for the trial court.65 But in exercising
that discretion, the trial court should follow a process
incorporating a number of statutory and common law principles.66
Since Wanberg v. Wanberg, we have articulated this process as a
matter of three steps: First, the trial court must determine
what specific property is available for distribution. Second,
the court must find the value of this property. Third, it must
decide how an allocation can be made most equitably.67 Again
since Wanberg, we have consistently noted that the trial court
generally should begin with the presumption that an equal
division of marital property is most equitable.68 We have also
noted that this presumption can be overcome by a consideration of
the Merrill factors69 as codified and expanded in AS
25.24.160(a)(4).70
But if either spouse owns separate property, then, as
we noted in Chotiner,
the division of property actually involves
more than three steps. The court must
determine what marital property is available
for distribution, value that property, and
make an equitable division if possible. If
an equitable division is not possible, the
court turns to the parties separate
property.[71]
It is clear from this language in Chotiner that the decision to
invade separate property may be undertaken only after the trial
court has attempted to use the marital estate to balance the
equities between the parties in light of the parties reasonable
needs. It is only if that attempt has failed that the trial
court should turn to the separate estate and proceed to adjust
the initial distribution as needed.72
In this case, the superior court invaded Bills separate
property before effecting an uneven division of the marital
estate, including assets and debts, in light of Careys reasonable
needs. Indeed, the marital estate was divided in a manner that
benefitted Bill, rather than Carey.73 Rather than dividing the
marital estate unequally in an initial attempt to balance the
equities, the superior court turned to Bills separate property.74
It was error to invade the separate estate without first
considering other equitable methods of distributing the marital
estate in light of the parties reasonable needs.
The superior court found, in light of the Merrill
factors, that the value of the marital estate was relatively
small; that Carey had been long absent from the workforce; and
that Carey lacked both retirement funds and other financial
resources. The superior court particularly found Carey to be
unable to generate an income level that even remotely resembles
the manner of lifestyle [to] which she and the children have been
accustomed.75 As a whole, these factors suggest that a large
deviation from the equal division of the marital estate is
justified.
But in some cases, even a large deviation from the
equal division of the marital estate will not be sufficient to
fairly allocate the economic effect of divorce.76 The legislature
has recognized that invasion of separate property may be
necessary and has provided that the court, in making the
[property] division, may invade the property, including
retirement benefits, of either spouse acquired before marriage
when the balancing of the equities between the parties requires
it.77 In Sampson v. Sampson, we determined that the Merrill
factors78 applied to the decision whether to invade separate
property.79 In Sampson, we explained that courts should
particularly consider factors such as the duration of the
marriage, the conduct of the parties during the marriage, the
manner of acquisition of the property, its value at the time of
acquisition and at the time of the property division, and any
other factors bearing on whether the equities dictate that the
other spouse is entitled to share in that property.80
In this case, the superior court relied on its finding
that the parties lived an opulent and wealthy lifestyle and that
Bill will continue to have access to such luxuries and wealth
from the Odom Corporation after the divorce while Carey will no
longer be the beneficiary of these privileges. But in Alaska it
is not expected that a former extravagant lifestyle will be
supported.81 The proper test to be applied by the trial court is
the reasonable needs of the parties.82 The result of the property
division must not lead to a widely disparate lifestyle between
spouses, particularly when children are involved. The trial
courts goal should be to provide Carey with a comfortable and
financially secure lifestyle, where her activities and the
childrens hobbies are able to continue and the children live in
comparable surroundings when with either parent.
Carey did provide evidence of her reasonable needs. In
the trial court, Carey submitted two projected monthly budgets
ranging from $11,550 to $12,489. The superior court presumably
considered these projections when it awarded Carey $8,000 a month
in interim support pending the ordered lump sum payment of $2.25
million by Bill. After weighing the conflicting evidence
concerning Careys reasonable financial needs, the superior court
certainly could have found that the equities demanded that 100%
of the marital assets be allocated to Carey and 100% of the debt
to Bill.83 Indeed, in her proposed findings in the trial court,
Carey urged the court to award her such marital assets as the
Anchorage and Girdwood residences free of debt as a first step
toward equitable division. As she remarks in her brief to this
court, [t]his would have given [Carey] . . . saleable and
appreciating assets that could provide reasonable financial
security and something approaching the lifestyle that the family
enjoyed during marriage.84
And if, after such an unequal division of marital
property, the trial court were to find that Careys reasonable
needs would still go unmet, then long-term spousal support might
be warranted.85 In Alaska, awards of spousal support are
permitted under AS 25.24.160(a)(2) if they are determined to be
just and necessary. The legislature provided a number of factors86
to help determine the amount and form of spousal support. For
example, in Broadribb v. Broadribb, we affirmed the superior
courts finding that
the available property in this case was
insufficient to compensate Sandra
adequately or to provide adequately for
her reasonable future living
expenses. . . . Given Sandras age and
limited earning capacity, the court
concluded that it is questionable
whether she will accrue any substantial
employer-provided pension in her
remaining work years, and that she will
therefore need to invest a significant
sum to provide for her future needs.
Against the backdrop of these findings,
the court awarded Sandra spousal
maintenance in the amount of $3,000 per
month for three years, and $2,000 per
month for two additional years. Based
on its extensive findings regarding
Michaels financial status, the court
concluded that he would be able to pay
this amount of maintenance.[87]
And Bills financial status, including his separate property, can
be taken into account when awarding spousal support.88
Initial consideration of the unequal division of the
marital estate and spousal support may have rendered unnecessary
the invasion of Bills separate property and avoided the practical
problems entailed in such a large lump sum payment, as well as
the issue of the excessive size of the invasion.89 In this case,
the invasion of the separate property in the sum of $2.25 million
was an abuse of discretion. Thus, we vacate the division of the
marital estate and the lump sum award of $2.25 million and remand
for reconsideration of the property division so that the trial
court may examine an unequal division of marital property, with
an award of most or all assets to Carey and the debt to Bill,
along with the possibility of spousal support as the preferred
method of meeting Careys reasonable needs in this case.90
V. CONCLUSION
The custody order and award of the Anchorage home are
AFFIRMED. The finding that Bills interests in Odom Enterprises
are separate property is AFFIRMED. Because the superior court did
not first attempt to balance the equities by unequally dividing
the marital estate, awarding property to Carey and debt to Bill,
its property division and invasion of separate property in the
amount of $2.25 million are VACATED and we REMAND for further
proceedings consistent with this opinion.
_______________________________
1 The superior court acknowledged an inconsistency in its
language in the first order and ordered both the Anchorage house
and the debt associated with it to Carey. Bills other motions
were denied.
2 For the purposes of this opinion, the term Odom
Enterprises is used to indicate both the Odom Corporation (the
Company) and the two related partnerships.
3 Martin v. Martin, 52 P.3d 724, 726 (Alaska 2002).
4 Id.
5 Id.
6 Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
7 Martin, 52 P.3d at 726.
8 Bellanich v. Bellanich, 936 P.2d 141, 143 (Alaska
1997).
9 Brooks v. Brooks, 733 P.2d 1044, 1058 (Alaska 1987).
10 Chotiner v. Chotiner, 829 P.2d 829, 834-35 (Alaska
1992).
11 Schmitz v. Schmitz, 88 P.3d 1116, 1122 (Alaska 2004).
12 Chesser-Witmer v. Chesser, 117 P.3d 711, 715 (Alaska
2005).
13 Hamilton v. Hamilton, 42 P.3d 1107, 1111 (Alaska 2002).
14 Schmitz, 88 P.3d at 1121.
15 Hamilton, 42 P.3d at 1111.
16 Veselsky v. Veselsky, 113 P.3d 629, 635 (Alaska 2005).
17 In re Adoption of A.F.M., 15 P.3d 258, 262 (Alaska
2001).
18 The heirlooms were one of the subjects of the motion to
reconsider filed by Bill. The motion was denied; the superior
court stated that [e]vidence was not presented as to specific
items to which Mr. Odom is sentimentally attached and [it] was
the Courts intent that the Anchorage home be conveyed to Ms. Odom
fully furnished. If the parties wish to negotiate alternative
arrangements . . . they are free . . . and . . . encouraged to do
so.
19 Cox v. Cox, 882 P.2d 909, 913 (Alaska 1994).
20 Harrower v. Harrower, 71 P.3d 854, 857 (Alaska 2003).
21 Green v. Green, 29 P.3d 854, 857 (Alaska 2001)
(alteration in original).
22 Miller v. Miller, 105 P.3d 1136, 1141 (Alaska 2005).
23 Schmitz, 88 P.3d at 1128-29.
24 Beal v. Beal, 88 P.3d 104, 119 (Alaska 2004).
25 See, e.g., Abood v. Abood, 119 P.3d 980, 984 (Alaska
2005).
26 Hansen v. Hansen, 119 P.3d 1005, 1014 (Alaska 2005);
see also Gardner v. Harris, 923 P.2d 96, 99-100 (Alaska 1996)
(using separate property bonds as collateral to obtain a
favorable interest rate on a marital loan did not transmute the
bonds into marital property).
27 Wanberg v. Wanberg, 664 P.2d 568, 571 (Alaska 1983).
28 Cf. Abood, 119 P.3d at 988 (requiring factors such as
the ongoing maintenance and managing of the property by both
parties, as well as placing the title of the property in joint
ownership and using the credit of the non-titled owner to improve
the property in addition to the use of the property as the
parties personal residence).
29 Keturi v. Keturi, 84 P.3d 408, 418 (Alaska 2004).
30 Green, 29 P.3d at 858.
31 Miller, 105 P.3d at 1141.
32 See, e.g., Nicholson v. Wolfe, in which the following
was not considered transmutation absent a specific finding of
intent:
The record indicates that Nicholson
maintained title to the Northstar assets in
his name alone; he meticulously kept separate
records, so that Wolfe was unaware of the
assets and debts of the business, and exerted
minimal control over them; Wolfe never
assumed any liability for the business, nor
did she co-sign any business loans; Nicholson
spent little or no marital monies on the
business. According to Wolfe, she helped set
up Northstars books (although she apparently
did not maintain them), answered the business
phone, and occasionally accompanied Nicholson
on his business activities. (Emphasis added).
974 P.2d 417, 423-24 (Alaska 1999).
33 Harrower, 71 P.3d at 857.
34 Id. at 858 (quoting turner, Equitable Distribution of
Property 5.22, at 230 (2d ed.1994)).
35 Schmitz, 88 P.3d at 1125.
36 Id. at 1125-26 (quoting turner, Equitable Distribution
of Property 5.22, at 236 (2d ed. 1994)) (There is general
agreement that the burden of proving marital contributions and
the burden of proving an increase in value are on the spouse who
seeks to classify appreciation as active.).
37 Schmitz, 88 P.3d at 1125-26 (citing Harrower, 71 P.3d
at 859 (Cases divide as to who bears the burden on the third
element, causation. The majority view would assign it to
[appellant], requiring him to prove the absence of a causal link
between his efforts . . . and any appreciation in his stock that
occurred during the marriage.)).
38 In support of her argument, Carey cites to Hayes v.
Hayes, 756 P.2d 298, 300 (Alaska 1988), where we noted that [t]he
concept of value is keyed to the price that a prospective buyer
would pay. But this cite is inapposite. In that case we were
discussing whether a minority discount should be applied to the
valuation of the spouses separate property. Id. at 299-300. We
were not discussing the effect of inflation on the valuation of
an asset.
39 733 P.2d at 1054 & n.22 (Alaska 1987) ([T]he $625,000
appreciation in the apartment complexs value appears to have been
passive rather than active. In other words, the propertys
increased value was caused solely by inflation and/or other
economic factors to which [the spouse] in no way contributed.);
see also Hansen, 119 P.3d at 1014 n.42 (Alaska 2005) (quoting In
re Marriage of Gottsacker v. Gottsacker, 664 N.W.2d 848, 853
(Minn. 2003) ([A]n increase in the value of nonmarital property
attributable to inflation or to market forces or conditions,
retains its nonmarital character.)).
40 733 P.2d at 1054.
41 Id. ([The husband] bought the complex for $300,000 in
February of 1976. In August, 1985 [the property] was appraised at
$925,000. During the period of the Brooks[es] marriage, the
record does not indicate that any major repairs or improvements
were made to the property. Thus, the $625,000 appreciation in
the apartment complexs value appears to have been passive rather
than active.).
42 Id.
43 125 P.3d 299, 305 (Alaska 2005) (Turning to the
specific elements of active appreciation, we first look to
whether the record shows that [the asset] gained value during the
course of the marriage.). In Hanson, we remanded for a finding
as to the value of the asset at the beginning of the marriage,
since neither party had presented such evidence before the court;
in this case, however, ample evidence of the value of the asset
was presented before the court.
44 See, e.g., Smith v. Smith, 475 S.E.2d 881, 888 (W. Va.
1996) (The court enunciated specific issues to be determined by
the lower court upon remand, including (1) the value of the
interest in the corporation at the time of acquisition, (2) the
value of the interest at the date of separation, (3) the
difference between the two, and (4) the [proportion] of that
difference that is due to active appreciation, i.e., attributable
to funds, talent, or labor that are assets of the marital
community. The resulting amount is marital property subject to
equitable distribution. (quoting McLeod v. McLeod, 327 S.E.2d
910, 915 (N.C. App. 1985), overruled on other grounds, Dunlap v.
Dunlap, 354 S.E.2d 734, 736-37 (1987))).
45 Turner, Equitable Distribution of Property (2d ed.
1994) Supp. 2004 5.21, at 332. The opposite is also true, since
if the separate propertys value at the end of the marriage is
greater than at the beginning, then there is marital interest to
divide even if the property had lost value at times during the
marriage. Turner, Equitable Distribution of Property (3d ed.
2005) 5.56, at 559 & 561 n.20.
46 883 P.2d 397, 401 (Alaska 1994).
47 Id.
48 We have previously held, generally, that the date of
valuation for property in a divorce proceeding should be as close
as practicable to the time of trial. Ogard v. Ogard, 808 P.2d
815, 819 (Alaska 1991). In Ogard, the former husband appealed
the date of valuation of the property because if the date of
separation were chosen, then he would have to cash out his former
wife at a greater amount due to changes in the real estate
market. We agreed with the husband to the detriment of the wife.
Id. at 819. This general presumption can be overcome and the
superior court can decide which appraisal provides the most
reliable information. See id. at 820; Berg v. Berg, 983 P.2d
1244, 1247-48 (Alaska 1999). In this case, an appraisal
performed near the date of separation was accepted for valuation
purposes. Carey did not object to that date during trial nor has
she on appeal argued for the use of a different date.
49 Bill and Carey were married in June 1990.
50 This valuation was completed by the Odom Companys
independent advisor in March 2002 and was considered sufficiently
close to the date Bill and Carey separated (May 2002).
51 Alaska Rule of Evidence 703 provides:
The facts or data in the particular case upon
which an expert bases an opinion or inference
may be those perceived by or made known to
the expert at or before the hearing. Facts or
data need not be admissible in evidence, but
must be of a type reasonably relied upon by
experts in the particular field in forming
opinions or inferences upon the subject.
52 Hayes, 756 P.2d at 299.
53 Carey also points to various economic indicia such as
the prices at which other insider interests had been bought out;
a price-to-revenue comparison with the recent purchase of another
company by the Odom Company; and the increase in property values
held by the related partnerships. But it was her responsibility
to provide expert testimony to show a link between these indicia
and an appreciation in value in the Odom Company during trial.
The superior court indicated that Carey provided no competent
evidence as to the fair market value of Bills interests.
54 Carey also argues that the perquisites drawn from the
Odom Company show that the company had increased in value. But
the superior court found that the amount of perquisites had not
increased during the marriage.
55 71 P.3d at 859-60.
56 88 P.3d at 1126.
57 Id. at 1126-27 (Where a partys inequitable conduct
hampers an opposing partys ability to develop potentially
important evidence, a court on appeal is justified in remanding
for development of appropriate evidence.).
58 Carey complains that the superior court should have
ordered a fact-finding hearing. But the superior court
explicitly found that there was enough evidence before it to
value Bills interests, noting that [p]laintiffs failure to offer
evidence on this issue does not mean that there is insufficient
evidence before the Court.
59 Brandal v. Shangin, 36 P.3d 1188, 1193 (Alaska 2002).
In addition, Alaska Civil Rule 90.1(e)(3) and (4) requires both
parties to file with the court information concerning the value
of each asset and liability and the proposed disposition, if any,
of each asset or liability.
60 883 P.2d at 401-02.
61 Id. at 402. Moreover, the assumption that the spouse
actually owned and would be entitled to sell the property was in
doubt due to an administrative appeal mounted by the state. Id.
62 For example, Carey tries to use Dr. Parkss example of
his own home, which has appreciated in value over the thirty
years he had owned it, but Dr. Parks was using that example to
show the effects of market appreciation, a form of passive
appreciation. She also attempts to use Greisens concession that
Bills interests had gained in value, but Greisen was once again
explaining the concept of market appreciation. Furthermore,
Carey neglects to acknowledge Greisens balancing of rents and
other inputs which would increase the value of the assets with
the depreciation of the buildings and other forces that would
decrease the value of the assets.
63 Carey cites with approval the fact that Bills expert
acknowledged that the partnership assets could be easily
appraised. But her point, that Bill should have had the separate
partnerships appraised, works against her own position, since she
also could have had the assets appraised.
64 See, e.g., Turner, Equitable Distribution of Property
5.57, at 582 (3d ed. 2005) (The most important factor in
determining whether a given person contributed to the value of a
particular asset is control. A person who had no control over
the value of an asset was not in a position to contribute to
it.).
65 Chotiner, 829 P.2d at 831.
66 Id.
67 Wanberg v. Wanberg, 664 P.2d 568, 570 (Alaska 1983).
68 Fortson v. Fortson, 131 P.3d 451, 456 (Alaska 2006)
(quoting Brown v. Brown, 947 P.2d 307, 313 (Alaska 1997)); see
also Wanberg, 664 P.2d at 574-75.
69 Merrill v. Merrill, 368 P.2d 546, 547-48 n.4 (Alaska
1962). See, e.g., Tybus v. Holland, 989 P.2d 1281, 1286 (Alaska
1999) (using the Merrill factors to decide whether an unequal
distribution of the marital estate is just).
70 AS 25.24.160(a)(4) states in pertinent part:
(a) In a judgment in an action for
divorce . . . the court may provide
. . . .
(4) for the division between the
parties of their property, including
retirement benefits, whether joint or
separate, acquired only during marriage, in a
just manner and without regard to which of
the parties is in fault; however, the court,
in making the division, may invade the
property, including retirement benefits, of
either spouse acquired before marriage when
the balancing of the equities between the
parties requires it; and to accomplish this
end the judgment may require that one or both
of the parties assign, deliver, or convey any
of their real or personal property, including
retirement benefits, to the other party; the
division of property must fairly allocate the
economic effect of divorce by being based on
consideration of the following factors:
(A) the length of the marriage and
station in life of the parties during the
marriage;
(B) the age and health of the parties;
(C) the earning capacity of the
parties, including their educational
backgrounds, training, employment skills,
work experiences, length of absence from the
job market, and custodial responsibilities
for children during the marriage;
(D) the financial condition of the
parties, including the availability and cost
of health insurance;
(E) the conduct of the parties,
including whether there has been unreasonable
depletion of marital assets;
(F) the desirability of awarding the
family home, or the right to live in it for a
reasonable period of time, to the party who
has primary physical custody of children;
(G) the circumstances and necessities
of each party;
(H) the time and manner of acquisition
of the property in question; and
(I) the income-producing capacity of
the property and the value of the property at
the time of division.
71 829 P.2d at 831.
72 Id.
73 Bills share of the marital estate came to $482,650
while Careys share came to approximately $425,000.
74 This error is similar to that in Brown v. Brown, 947
P.2d 307 (Alaska 1997). In Brown, the case was remanded because
an examination of the superior court opinion on remand indicates
that the trial court clearly failed to begin with the presumption
that an equal division of marital property is the most equitable.
Instead, the trial court appears to have begun with the
presumption that an equal division of the marital property and of
Wendys separate property would be the most equitable. Id. at 313-
14.
75 We have previously noted that [w]hen a couple has
sufficient assets, the spouse with the smaller earning capacity
can and should receive a larger share in the property
distribution. Dodson v. Dodson, 955 P.2d 902, 914 n.19 (Alaska
1998) (alteration in original); see also Berry v. Berry, 978 P.2d
93, 96 (Alaska 1999) (noting that [a]n unequal division may be
upheld when it is justified by relevant factors identified in the
findings of the court (quoting Hayes, 756 P.2d at 300)).
76 AS 25.24.160(a)(4).
77 AS 25.24.160(a)(4) (emphasis added); see also Carlson
v. Carlson, 722 P.2d 222, 223-24 (Alaska 1986) (construing this
statute).
78 Merrill, 368 P.2d at 547-48 n.4.
79 Sampson v. Sampson, 14 P.3d 272, 277-78 (Alaska 2000).
80 Id. at 278 (quoting Vanover v. Vanover, 496 P.2d 644,
648 (Alaska 1972)).
81 Beal, 88 P.3d at 112.
82 Turner, Equitable Distribution of Property 8.16, at
867 (3d ed. 2005).
83 Cf. Tybus, 989 P.2d at 1286 (affirming an award of all
of the marital debt to the spouse with the higher earning power).
84 Carey continued to maintain that [s]ome division of
Bills claimed separate property would still be necessary; but, as
Carey proposed, the amount awarded from those interests would
have been substantially offset in a final reconciliation by the
fair market value of the two homes.
85 See, e.g., Hammer v. Hammer, 991 P.2d 195, 199 (Alaska
1999) (affirming award of permanent spousal support as just and
necessary due to spouses lack of work experience, responsibility
as childs custodial parent, her deafness, lack of job prospects,
and limited ability to retrain for employment).
86 AS 25.24.160(a)(2) provides:
(a) In a judgment in an action for
divorce . . . the court may provide
. . . .
(2) for the recovery by one party from
the other of an amount of money for
maintenance, for a limited or indefinite
period of time, in gross or in installments,
as may be just and necessary without regard
to which of the parties is in fault; an award
of maintenance must fairly allocate the
economic effect of divorce by being based on
a consideration of the following factors:
(A) the length of the marriage and
station in life of the parties during the
marriage;
(B) the age and health of the parties;
(C) the earning capacity of the
parties, including their educational
backgrounds, training, employment skills,
work experiences, length of absence from the
job market, and custodial responsibilities
for children during the marriage;
(D) the financial condition of the
parties, including the availability and cost
of health insurance;
(E) the conduct of the parties,
including whether there has been unreasonable
depletion of marital assets;
(F) the division of property under (4)
of this subsection; and
(G) other factors the court determines
to be relevant in each individual case.
87 956 P.2d 1222, 1226 (Alaska 1998).
88 AS 25.24.160(a)(2)(D); see, e.g., Turner, Equitable
Distribution of Property 8.33, at 941 (3d ed. 2005) (noting that
a spouses separate property can be taken into account when
awarding alimony).
89 Both Bill and Carey challenged the $2.25 million
amount. Bill additionally challenged the lump sum form of the
award as imposing an impermissible hardship on him.
90 We do not mean to imply that when an unequal division
of the marital estate is determined to be insufficient to meet a
spouses reasonable needs, spousal support is to be preferred to
the invasion of separate property in every case. The facts of
each case will determine whether an invasion of separate property
or spousal support is warranted. In this case, spousal support
is preferable to invasion of separate property because of the
illiquid nature of Bills interests combined with the likelihood
that they will continue to yield considerable cash flow.
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