Opinion ID: 2603447
Heading Depth: 1
Heading Rank: 3

Heading: allocation of trust funds.

Text: In its order of December 19, 1984, the superior court followed the trustee's recommendations and provided that Vida be allocated $174,162.05, the present value of her remaining property rights. Also, the court provided that the trustee reserve for Clark $70,098.80, the present value of the child support due him. The trustee was also ordered to pay in his discretion and to the extent possible Ken's tax indebtedness for 1984. [7] Ken has raised numerous specifications of error relating to these provisions of the December 19, 1984, order. First, he contends that there was no admissible evidence to support the present value determinations. Second, he argues that he is not obligated to pay Clark's educational expenses. [8] Finally, he argues that the superior court erred in ordering that the funds held for Vida have a higher priority than Ken's 1984 income tax obligations. The superior court accepted the trustee's calculations in reaching its present value determinations. Review of the record discloses that the sources used to compute the discount rates are specifically referenced. [9] However, even if the superior court erred in its calculations, any error in this regard is harmless at this point. Since no funds have actually been disbursed from the trust, as it has not been terminated, the allocations ordered serve merely as a guide to ascertainment of the size of the trust's surplus, [10] which would be used to meet Ken's federal tax obligations. The superior court did, however, include in its calculation of money to be allocated for Clark the present value of his educational expenses. Ken is not obligated to pay Clark's educational expenses. In the April 14, 1977 Findings of Fact and Conclusions of Law, the superior court expressly noted that in awarding the child support payments the child's educational needs were considered. Although Vida claims that the trustee's accountings reflect that these expenses were paid throughout the period without objection, specific reference to Clark's educational expenses is made only for the last two accounting periods. In our view, Clark's educational payments were included in the original award for child support. An increase in this award would be improper at this time. Moreover, Alaska law does not obligate payment of post-majority educational support. Dowling, 679 P.2d at 483. The error, though, is again harmless, merely affecting the theoretical allocation of the funds prior to taxes. The superior court also erred to the extent that it ordered the funds allotted Vida to have priority over Ken's federal tax obligations. In its original decision, the superior court concluded that while Ken was liable for all federal and state income taxes, Vida only had first priority in trust funds after tax liens. In the December 19, 1984 order, the superior court reiterated that Vida had first priority after tax liens; nevertheless, it provided that the trustee could pay in his discretion ... the indebtedness that is due and/or to become due to the Internal Revenue Service for 1984 taxes. Despite this language, it is clear that the superior court's original intention was to accord priority to Ken's federal tax obligations. The trustee should not have been granted any discretion in the matter of payment of these obligations. This portion of the superior court's order, however, has not yet injured Ken and may not, if properly interpreted by the trustee. AFFIRMED and REMANDED for modification consistent with this opinion.