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Alaska Property Division
Property Distribution Laws in Alaska

In Alaska, the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the Superior Court divides the marital estate within the Judgment of Divorce.

Alaska is an equitable distribution state, and all property may be included in the distribution if the court decrees. Equitable does not mean equal, or even half, but rather what the Superior Court considers fair.

Alaska joins the concept of equitable division and community property in an unusual way. Alaska permits couples to divide marital property using community property rules. To do this, couples create a community property agreement, or a community property trust. In doing so, they designate all their property as community property, or they can specify in their agreement that certain items, for example earnings during the marriage, remain separate property.

Before or during marriage, spouses may enter into community property agreements. This agreement must be voluntary to be enforceable and it must include a complete disclosure of all the other spouse’s property and financial obligations. The other spouse has the right to waive disclosure

Good legal advice is a sound idea because community property agreements may have effects beyond property distribution in divorce, such as inheritance.

Absent a community property or prenuptial agreement, the court divides property using equitable distribution rules. Frequently, one spouse transmutes his or her separate property into marital property. The court may presume that a spouse who changed the title on a home from his or her name to joint ownership intended to make a gift of the home to the marriage. Based on conduct, the court may rule that the house was a gift even without a change of title. For example, the use of the house by both spouses during the marriage could be sufficient conduct to show that the original owner intended to gift the house. Joint payment of the mortgage or taxes or upkeep supports an argument that the home is jointly owned regardless of title.

In dividing the property, the court first categorizes property as marital or separate assets, assigns a monetary value for each piece of property, and then distributes the property between the spouses.

However, Alaska is one of eight jurisdictions that include separate property in the marital estate “providing the court finds a special showing of need by the non-titled spouse.”

Factors in Equitable Distribution

In dividing property, the court does not consider marital fault, but according to the Alaska Dissolution Statutes 25-24-160, 25.24.230 “must fairly allocate the economic effect of dissolution of marriage by being based on consideration of the following factors:

  • the length of the marriage and station in life of the parties during the marriage
  • the age and health condition of the parties
  • 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
  • the financial condition of the parties, including the availability and cost of health or medical insurance
  • the conduct of the parties, including whether there has been unreasonable depletion of marital assets
  • 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
  • the necessities of each party
  • the time and manner of acquisition of the property in question; and
  • the income-producing capacity of the property and the value of the property at the time of division

In dividing property, the courts may not consider marital misconduct, but courts consider a spouse’s wasteful dissipation of marital assets. Judges weight the factors differently depending on the specifics of a case.

Marital Property vs. Separate Property

In Alaska, courts always divide marital property at divorce. Unless there is a mutual agreement (for example, a prenuptial or postnuptial agreement, a community property agreement, or a community trust), some property remains the separate property of a spouse. Absent an agreement, separate property includes property he or she owned before marriage or acquired during marriage by gift or inheritance, as well as property exchanged for separate property, the earnings or appreciation of separate property and money received in a personal injury claim, except parts going to the community for expenses.

Separate property that is commingled with marital property becomes marital. Untainted separate property obtained before or during the marriage remains immune from distribution. This separate property includes, but is not limited to, gifts and inheritances.

In order to establish an asset as separate property, it must remain under the control of the spouse claiming it. Property combined with joint property for the benefit of both spouses becomes marital. In Alaska, absent an agreement, the appreciation in the value of community property becomes marital property, as do its earnings.

Property Defined

In Alaska, marital property includes assets and debts a couple acquires during marriage.

Marital property means not only the obvious assets the couple owns - such as “houses, automobiles, jewelry, clothes, bank accounts, and property,” but also “pensions and retirement accounts, investments, cash value of life insurance policies, family owned businesses, tax refunds, tax credits, [and] trademarks.”

Joint checking/savings accounts, separate money deposited in a joint checking/savings account, jointly owned real estate, gifts from one spouse to the other – all are marital. Property held immune - “untainted” as it is sometimes called - from commingling remains separate. This includes separate checking/savings accounts opened before the marriage, stock owned before the marriage, individual inheritances, any property classified as separate under a prenuptial agreement of the parties.

Valuing Property

Depending upon the asset and the agreement of the spouses, different methods of valuation are used to determine the value of a marital asset. When the spouses agree, courts generally accept what they say about the value of an asset. Absent an agreement, experts may be retained by the parties or by the courts to determine the value of marital assets. Such experts may include accountants, real estate or business appraisers, pension valuators. The use of experts adds to the cost of the divorce.

The Martial Home

In Alaska, as in many jurisdictions, the equity of the marital home is often one of the biggest marital assets. The equity is the market value of the house, less any liabilities against the property, such as a mortgage, taxes, home equity loans. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

  • The spouses sell the home and divide the proceeds.
  • One of the parties may refinance the home and “buy out” the other party.
  • One spouse (usually the custodial parent) remains in the home with the exclusive use and possession for a certain period of time (for example, until the youngest child graduates from high school), then either buys out the other spouse or sells the home and divides the proceeds.

Pensions and Retirement Accounts

In Alaska, the court may include the retirement benefits and plans earned by both spouses as marital assets available for division.

Retirement benefits vary greatly but can generally be divided into two groups:

  • Defined Contribution Plans: A defined amount of money belonging to the employee. The employee and/or the employer make defined contributions. The balance of the plan is constantly changing, but its value is definable at any given point. 401(k)’s, 403(b)’s and profit sharing plans fall into this category.
  • Defined Benefit Plans: A retirement benefit where an employer promises to pay a benefit to an employee sometime in the future, based upon some type of formula. Normally, this formula is based on the employee’s salary near the end of his or her career and the number of years he or she worked for the employer before retirement. Defined benefit plans are much more complicated to value and often require the professional evaluation of an actuary to determine exact values.

Alaska statute places several limitations on the inclusion of retirement benefits as divisible marital assets. These conditions include provisions that:

  • the spouse owning the benefits must be vested in them or be receiving them on the date the divorce is filed
  • the parties must have been married for ten years, during which the benefits were being accumulated
  • any retirement benefits earned prior to the marriage must be excluded
  • the total benefit extended to the non-covered spouse must not exceed half the benefit to be considered
  • the payout to the non-covered spouse may not begin until the covered spouse begins receiving benefits or reaches age 65, whichever comes first.

In Alaska, if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.

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