Opinion ID: 1296720
Heading Depth: 4
Heading Rank: 3

Heading: Source of the Funds Method

Text: Alternatively, C.B. proposes that a third approach to property division should have been used in this case. He argues that this court should adopt the source of the funds rule. Without fully defining this rule, he describes it as providing that the measure of compensation to each party is the base amount of the marital contribution along with any appreciation or depreciation, so that both parties receive a fair and proportionate return on their investment. [2] As C.B. points out, in Zimin v. Zimin, 837 P.2d 118 (Alaska 1992), this court affirmed the trial court's use of the source of funds approach: Although we do not adopt the source of funds rule per se, it is not inconsistent with our statutes and caselaw. Id. at 122 n. 6. However, the circumstances under which the rule was applied in Zimin differ from the instant case. In Zimin, the trial court was essentially forced into a source of funds approach because there was no evidence regarding the present value of the disputed property. Id. at 122. Therefore, the court valued the marital portion of the various assets based on the debt payments made during the marriage. Id. The trial court recognized that this method failed to take into account the post-marital appreciation or depreciation of the property. Id. Our holding was thus limited to the approval of the source of funds approach in the limited context of determining current value in the absence of any other evidence. Id. n. 6. We recognized that the trial court could have reached the same result under our rules of equitable division and therefore it did not abuse its discretion under the circumstances. Id. To require the use of the source of funds rule in this case would be an expansion of the Zimin holding. It is one thing to hold that use of the source of funds rule in limited circumstances is not an abuse of discretion; it would be quite a leap from Zimin to hold that it must be applied in a given set of circumstances as a matter of law. We are not satisfied that such a leap would be appropriate. Therefore, we decline to depart from the Wanberg method of property distribution.