Tuesday, February 21, 2006

Case Law Development: Plenty of Property Division Issues

The Alaska Supreme Court reviewed a multitude of property division issues in a case that reads like a family law final exam (!)  Without giving away too much of the answer, here are some of the questions the court decided:

  • Suppose Wife, a dermatologist, earns nearly five times more than her husband, an unemployed nurse, but is a parapalegic, with a high risk of future medical problems that would render her unable to work. Is maintenance appropriate? (no)
  • Should Wife's significant health issues justify granting her a majority of the marital assets despite her higher earnings? (yes)
  • Should a court give great weight in property division to the fact that Wife's parents made considerable loans to the couple during the marriage and that Wife contributed substantial separate funds to the marriage? (Limited weight is enough - no need to, in effect, provide an accounting)
  • If wife's medical practice during the period the couple was separated generated substantial profits - profits in excess of what might be attributed to her efforts alone -- should those excess profits be treated as marital property even though one cannot prove goodwill in the medical practice and even though Alaska holds that earnings during separation are separate? (whew! The answer is yes, the excess profits should be valued and treated as marital property).
  • Where the court required Wife to make a cash payment to Husband, was the court also required to give Wife a credit for the costs and taxes involved in liquidating property?  (No, not if the court didn't order the sale and there was no indication that the sale was required or imminent).
  • Need the court include loans from parents as marital debt to be divided if the parents have never demanded payment and there is evidence that they did not treat the loans as enforceable obligations?  (No, the court need not characterize these "loans" as marital debts)
  • If a court erroneously classifies one spouse's $1200 gift to another as marital property in a case with a marital estate over 2.8 million dollars, is this reversible error? (No, "The process of classifying marital property in a divorce is not an end in itself but simply serves to inform the trial court's decision on the ultimate issue of what constitutes an equitable distribution of the marital estate.")

Good luck grading!

Fortson v. Fortson, 2006 Alas. LEXIS 23 (February 17, 2006)
Opinion on the web (last visited February 20, 2006 bgf)

http://lawprofessors.typepad.com/family_law/2006/02/case_law_develo_27.html

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Comments

I argued this matter on behalf of the wife. It should be noted that the reason the wife received an unfavorable interest rate is because the husband paid the mortgage late more than 12 times in 24 months. The husband had sole responsibility for doing so yet failed to mention this to the wife. This case is a travesty and contravenes Rose v. Ditto out of our 4th DCA.

Posted by: Lisa Baird | Jun 23, 2006 10:49:19 AM

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