Opinion ID: 1287476
Heading Depth: 3
Heading Rank: 3

Heading: Permanent Fund Dividends[6]

Text: Allan's last argument is that it was error on the superior court's part to refuse to order Lidia to repay some $4,000 which she borrowed from her children's Permanent Fund Dividends (PFDs). At trial Lidia testified that [t]he last two years I have taken out a loan from my kids with their dividends because I needed to pay bills. Lidia further testified that she had a verbal agreement with her children to repay them $2,000 each. [7] During final argument, Allan's counsel requested an order that says Permanent Funds will go into a trust fund, not to be spent in the meantime. In response to this request the superior court, in its conclusions of law, provided as follows: Allan is to apply for the children's PFD each year that they are eligible. The PFD is to be deposited each year in an interest bearing account and held for the children. When each child reaches 18 years, the money in the account is to be turned over to the child. No money is to be withdrawn from the accounts until then. Allan then moved for reconsideration of the issue of the children's PFDs. More specifically, Allan requested that Lidia be ordered to repay the borrowed $4,000 to the children's trust account. In its order denying reconsideration the superior court stated: At the conclusion of trial, the court ordered that Mr. Hayes apply for and deposit the children's permanent fund dividends. The dividends are to be deposited in interest bearing accounts and not invaded until each child turns eighteen. Mr. Hayes has asked the court to reconsider the extent of this order. He wishes the court to order that Ms. Hayes pay back the children's permanent fund money she borrowed during the parties' separation. Ms. Hayes opposes this request. The court has considered both arguments and concludes that no modification to the original order will be made. While it is true that Ms. Hayes agreed to pay the money back, that agreement is between her and the children. Furthermore, during the parties' separation, for the peculiar reasons already explained in paragraph 22 of the Conclusions of Law dated March 22, 1994, Mr. Hayes underpaid the amount of child support actually due. Although Mr. Hayes' underpayment was not done in bad faith or intentionally, the fact remains that during the separation, Ms. Hayes paid more than her share of child care costs. Given these factors, the court will not order Ms. Hayes to payback [sic] the money. Before the superior court, Allan conceded that Alaska law is silent or incomplete on the subject of a parent's duty to administer their children's Permanent Fund Dividend monies. In Lee v. Cox, 790 P.2d 1359 (Alaska 1990), one of the points in contention in the appeal was whether the superior court abused its discretion in ordering the mother to reimburse her son for all Permanent Fund Dividends received on his behalf. In regard to this contention, we said: [Mr. Cox] properly concedes that there is no law in this state requiring parents to set aside their children's permanent funds. See, e.g., L.A.M. v. State, 547 P.2d 827, 832-33 n. 13 (Alaska 1976) (enumerating among those parental rights protected by the constitution the right to control and manage a minor child's earnings and property).... Moreover, the record contains no findings by the trial court which support [Mr. Cox's] assertion that the parties contractually agreed to set aside the permanent fund monies. Id. at 1363. Alaska Statute 43.23.005(c) provides that [a] parent, guardian, or other authorized representative may claim a Permanent Fund Dividend on behalf of an unemancipated minor or an behalf of a disabled or incompetent individual who is eligible to receive a payment under this section. In this appeal, Allan again concedes that the statute is silent concerning what a parent must or should do with a dividend after it is distributed. He attempts to distinguish Lee by noting that the record in the instant case clearly indicates an agreement to repay the PFD monies. The agreement Allan refers to, however, is between Lidia and the children, not between Lidia and Allan. Although it is clear that Lidia did promise the children that she would repay the $4,000, she made no promise to Allan, and reached no agreement with him, regarding repayment of those funds. Given our holding in Lee, the superior court's explanation for its ruling, and the legislature's silence as to what parents must or should do with PFDs received on behalf of unemancipated minors, we hold that the superior court did not err in rejecting Allan's motion that Lidia be required to repay the $4,000 in PFD monies that she borrowed.