Opinion ID: 2633636
Heading Depth: 5
Heading Rank: 1

Heading: Transmutation

Text: Transmutation occurs when married parties intend to make a spouse's separate property marital and their conduct during marriage demonstrates that intent. [20] The central issue in determining transmutation is the intent of the owner of the separate property, as demonstrated through ... words and actions. [21] If transmutation is found, the property becomes entirely marital. [22] In this case, the superior court determined that the doctrine of transmutation was inapplicable to Bill's assets. Carey argues that Bill's interests in both the company and the partnerships became marital assets through transmutation in two ways: (1) the untraceable commingling of assets [23] and (2) the treatment of the asset as a joint holding. [24] We disagree and uphold the superior court's conclusion that Bill's interests in the company and partnerships did not become marital through transmutation. Carey first argues that Bill's separate assets became marital through transmutation as a result of commingling. Her argument is essentially that because Bill used his company account as the main checking account to pay bills for the marriage, the company account transmuted into marital property. But it is well established in Alaska that the mere commingling of separate property with marital property does not lead to a finding of transmutation. [25] Using part of a premarital account for a marital purpose does not change the balance of the [premarital] account into marital property so long as no new contributions of marital funds to the [premarital] account are made. [26] Thus, while Bill's payment of money for marital bills out of his separate account converts the money actually used into marital property, it does not, without more, convert the entire separate account into marital property. Carey's second argument relies on the joint holding theory of transmutation. Separate property can become marital if the parties, by their actions during marriage, demonstrate their intention to treat [separate] property as joint holdings. [27] Carey alleges that Bill's intent to make his interests in the Odom Company marital is evidenced by the fact that Bill and Carey's marital finances were enhanced in large part by perquisites supplied by Odom Enterprises in the form of paying the bills for vacation residences, travel, and transportation, as well as for housekeepers, the cars' fuel and insurance costs, and the maintenance and painting of houses. As Carey put it, every aspect of the Odoms' opulent and privileged marital life was supported, in whole or substantial part, by the Odom [E]nterprises' money. She claims that the support of Odom Enterprises of the marital life was pervasive to the extent that the line between separate and marital property [became] so thin as to be substantively meaningless. But when determining whether separate property has transmuted into marital property, we have previously determined that the mere use of an asset's proceeds for marital purposes is insufficient. [28] In affirming findings of transmutation, we have taken into account the active involvement of both parties in the ongoing maintenance, management and control of the property; [29] a pooling of both parties' time, talents, and any premarital assets that they had into the joint holding; [30] or a showing that the owner-spouse made no attempts to maintain the separate character of this property. [31] But in this case, there is no evidence beyond mere use of the asset's proceeds to fund marital activities to support a joint holding theory of transmutation. Carey did not maintain or manage Bill's separate property. Carey's name was not on any of the company's bank accounts; her credit was not used for any bank loans; and she never held any Odom stock. Carey was not involved in planning the details of company business and conceded that she played no role in the management of the company or the partnerships. Finally, Carey was aware that the Odom brothers did not want their wives working in the business or to have ownership interests in the shares owned by the brothers. These factors together indicate not only that Carey did not maintain or manage the separate property but also that Bill intended and made active efforts to ensure that his property remained separate. [32] Because the mere use of a separate asset for marital purposes cannot transform the separate asset into a marital asset, Carey's transmutation argument fails.