Ending the

Marriage

Jurisdiction for Divorce Present in Alaska and intent to remain

If one spouse is Alaska resident, the other can file in Alaska

Doesn’t matter where couple married

Military members need to be stationed continuously in Alaska for 30 days, but do not need an intent to remain

If no jurisdiction over child custody and/or marital property is in another state, may be more practical to divorce elsewhere

May be problems with enforcing property and debt provisions out of state

Court can hear only issues that it has jurisdiction over; can grant divorce but not address child custody for lack of jurisdiction

Generally, you must wait at least 30 days

after filing for divorce or dissolution before

the judge will sign the final divorce decree.

2 kinds of cases

Dissolution (uncontested = agreement)

Must agree on everything and file

together

Divorce (contested)

Same outcome

Same legal standards

Dissolutions are much quicker and involve

only 1 hearing

Divorces may involve several hearings

and a trial

Divorce contested; case will decide:

Ending the marriage

Dividing property and debt

Custody and visitation

Child support

Spousal support

Paternity disestablishment/establishment

Procedure: Plaintiff files complaint and other required documents; defendant has 20 days to file answer; hearings as needed based on motions and/or judge’s desires; trial to resolve all issues

As long as one spouse wants to end the marriage, the

divorce will happen. The other spouse cannot stop

the divorce because he/she doesn’t want one.

What if I or my spouse wants to

file bankruptcy and divorce? Once a bankruptcy case is filed, it usually

stops (stays) all property issues

Can still decide custody issues and

perhaps even issue divorce, but unlikely to

finalize property/debt division

Should talk to bankruptcy attorney about

whether to file before or after the divorce,

because there can be significant

differences and consequences

Property and

Debt Division

What is property?

Anything that is owned or can be owned, such as a home, land, automobiles, money, stocks, retirement accounts, an interest in a pension, household goods, etc.

In divorce and dissolution cases, people often mean property AND debt when they refer to property.

What is debt? Any money owed to a business

or person. Some common types

of debt in a divorce or dissolution

case include credit card debt,

medical bills, mortgages, car

loans, personal loans, or student

loans.

3 step process for handling

property & debt in a

divorce:

1. Identify marital property

2. Value marital property

3. Distribute equitably

Step 1: Identify Marital Property

Common Categories

• Real property

• Personal property (household goods, vehicles, snow

machines, 4 wheelers, boats, airplanes) • Retirement benefits, including health insurance paid by

employer at retirement

• Pensions

• Debts (credit cards, mortgages, car loans, student loans, bank loans)

What is marital property? Presumption that anything acquired (or any debts incurred)

between the date of marriage and the date of separation is

marital.

Salaries and benefits earned during the marriage belong to the marriage does not matter who bought or paid for something;

also means half of any portion of retirement/pension earned

during the marriage belongs to each spouse

Exceptions:

- gifts to one spouse (unless used for the benefit of

the marriage, such as a dishwasher)

- wedding bands or engagement rings

- inheritances

- disability or social security benefits

- property acquired solely from pre-marital sources of

income

Court may include premarital assets

in marital estate if: 1. Express intent is to make property marital, OR

2. Intent to contribute to the marriage is implied, by

commingling of the assets or because the other spouse

actively manages or contributes to the upkeep of the asset

Placing separate property in joint ownership creates a

rebuttable presumption that the owner intended to make

the property marital.

Common example is marital home: even if one spouse

bought it before the marriage and is only one on the title and mortgage, it may be marital or partially marital if both

spouses lived there.

Separate property can become marital property

through active appreciation (marital funds / efforts

cause a spouse’s separate property to increase in

value during the marriage)

Court must find:

1. increase in value during marriage, AND

2. marital contribution (may be

monetary or through labor), AND

3. Causation (other spouse’s money and/or

efforts caused the increase in value)

Common examples are businesses and real

property

Post-separation assets and debts are not

marital if acquired with post-separation

income or separate money.

Date after which property should be

classified as post-marital is ordinarily the date

of the functional termination of the marriage.

This is the point at which the marriage has

terminated as a joint enterprise or when the

couple is no longer functioning as an

economic unit.

Step 2: Value the Property and Debt

There are two things to keep in mind when valuing

property and debt:

1. property must be valued at its "fair market

value," which generally means the garage sale

value or Craigslist value, and

2. the value of both property and debt should be

set as close to trial (or mediation/settlement

hearing) as possible.

Step 3: Divide Fairly and Equitably

The presumption is 50-50 division

This does not mean every asset/debt is split down the

middle. It means add up the values of the assets and debts

that each spouse gets and compare the net totals.

One spouse may owe the other an “equalization payment”

or lump sum of money to make the net “piles” equitable

Equalization payments can be as a payment plan over time.

This is NOT considered spousal support or income, but is part

of the property division and is not taxable.

Factors the Court will consider when deviating from

a 50-50 split (aka the Merrill factors) • Length of marriage and station in life of both parties during the

marriage

• Age and health of parties

• Earning capacity including education, training, skills, experience,

length of absence from job market, custodial responsibility for the

children during the marriage

• Financial condition of the parties, including availability and cost of

health insurance

• Conduct of the parties, including whether there has been

unreasonable depletion of marital assets

• Desirability of awarding the family home to the party with primary

physical custody of the children

• Circumstance and necessities of each party

• Time and manner of acquisition of the property

• Income producing capacity of the property and value of the

property at time of division

Where marriage is short and there is little

commingling of the property, court may

return each spouse to pre-marital position

(each keep own property and debt)

Typically for marriages of one year or less,

but no definite cut-off time

Can a lender/creditor require payment of a debt

even if a court order says the opposing party has

to pay?

Yes. When more than one party agrees to be responsible for a

single loan or debt, the parties are jointly and severally liable. This

means the lender or creditor (bank, credit card company,

mortgage company) can “go after” one or both parties to

receive payment, even if a court order says specifically that one

party is responsible for paying a joint debt. This is because when

you get a loan or a mortgage or a credit card, you make an

agreement with that company that the people on that loan or

account will pay any debt. So the lender or creditor cares only

about getting someone to pay. Regardless of what the court

order says, there is a contractual relationship between the lender

or creditor and the parties who had the debt.

Refinancing

When both parties’ names are on a loan, debt, utility bill, or

mortgage, the party who will be responsible needs to refinance the

loan to get the other party’s name off.

If refinance is not done ahead of the mediation or trial, can be

helpful to set some parameters for the refinance.

-Example: agreement that Wife gets the home, but both

are still on the mortgage. Wife has one year to accomplish

refinance and if unable to do so, home must be sold.

Some parties are comfortable with trusting the other spouse to pay

the debt he/she agreed to take without a refinance. This is fine as

long as they understand that they would still be responsible if the

other party defaults. Their remedy in that event would be to file a

motion for a judgment against the other party for reimbursement.

Tools

Property and Debt Worksheet: http://courts.alaska.gov/shc/shc-

1000n.pdf

Discovery and Disclosure: http://courts.alaska.gov/property.htm

- Every person in a divorce is required to do Civil Rule 26.1

Disclosures

- Requires spouses to exchange income information and

sign disclosures for any financial institutions and employers

so that the other spouse can independently research

information about assets and benefits

- Good idea to have this accomplished prior to mediation,

particularly for more complex property issues, such as

retirement accounts, or when one spouse lacks

information

Combined Property and Debt Spreadsheet (see other email

attachment that Wendy created—it does the math for you!)

How does the court divide retirements and

pensions?

Usually, the court will issue a Qualified Domestic Relations Order

(QDRO, pronounced “Kwah-dro”). This separate order contains

special language for the retirement plan administrator that allows

them to pay a portion of the money directly to the former spouse.

QDROs are often complicated and require specific language. If

parties want to divide retirement accounts, it is a good idea to

agree on a percentage or amount and then ask an attorney who

specializes in QDROs or the retirement plan administrator to

prepare the order. Parties should also discuss who will pay for

valuation of the account and/or preparation of the QDRO.

Most judges will not finalize the divorce until the QDRO is signed.

For more information and links to some specific types of plans, see

http://courts.alaska.gov/shcqdro.htm

Military Retirement

The Military “10-10” rule: if spouses have been married at least ten

years that overlap with at least ten years of military service by one

spouse, then the military will pay the former spouse directly from

the retired military member’s pension once that person is eligible

and retired. It requires specific language in the divorce decree.

If spouses do not qualify under the above rule, they can still divide

the pension, but the former military member must pay the former

military spouse directly. The language and procedure for doing

this must be clear in the divorce decree.

Many military members also contribute to a Thrift Savings Plan (TSP),

which is similar to an IRA. This can also be divided—it does not

require a separate QDRO, but does require specific language in

the divorce decree.

See: http://courts.alaska.gov/judges/divmilpay.pdf

Can the court divide people’s property that

lived together, but never married?

Yes. The court can divide the property of people who lived

together in cohabitation or were domestic partners, but who

are not married. However, unmarried couples need to file a

separate civil case to deal with dividing their property and debt. There are no court forms for filing a complaint to divide

property of unmarried couples who split up. There are

different legal theories that may apply depending on the

specific situation in the relationship.

Very minor property issues may be addressed in a custody

case (if the people have children together), particularly if the parties can agree.

Spousal Support

Two Types:

Rehabilitation: one spouse pays the other for

school, job training, etc. to better enable the

other spouse to provide for him or herself

-Limited duration

-Must be a defined program of study

Reorientation: one spouse pays the other

money to temporarily tide him or her over

(“get used to having less money”)

-Rarely lasts more than a year

Spousal Support Considerations

Spousal support is disfavored in Alaska—spouse

who requests it must make a strong showing of

need (use the Merrill factors as a guide)

If one spouse is disadvantaged or has fewer

prospects, the preference is to make an unequal

distribution of property rather than order support

Goal is for parties to be financially separate upon

divorce

Special Considerations for Military

Many military members receive extra pay for having dependents or for being married

The military has a separate process that may require the

military member to provide support for a spouse during

separation - Usually the non-military spouse has to request it from

the change of command, and they will not normally

backdate it

- The support amount is determined by different criteria than state law

- The support will end on the date of divorce

The non-military spouse’s medical coverage also ends on the date of divorce

Other Consequences to Divorce

Spouses may wish to consider:

-Whether one spouse will lose insurance coverage and when precisely it ends

- Tax consequences—parties can only file married if

they were still married on December 31st of the tax

year (in other words, even if they were married the other 364 days, it doesn’t matter)

-Delaying the effective date of the divorce or doing a

temporary legal separation in order to keep certain

benefits of marital status -Parties can agree that everything else is final

(property division, custody, etc.) except for the

actual divorce.

-They can also agree on a specific date in the

future such that it will automatically issue without another hearing or mediation session