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