Opinion ID: 1349090
Heading Depth: 2
Heading Rank: 1

Heading: Credit for Post-Separation Payments

Text: Clair argued below that the economic partnership created by the marriage ended upon separation, thus he was entitled to credit for post-separation payments made to maintain the marital estate and to support Sandra. Judge Johnstone, however, found that due to the extensive commingling of finances, the parties continued to function economically as a single unit until the summer of 1990. Based on that finding, the court identified all of the parties' marital assets as of May 11, 1990. We find that the court's economic unit finding was clearly erroneous. The first step in the process of marital property division is to determine what property is available for distribution. Chotiner v. Chotiner, 829 P.2d 829, 831 (Alaska 1992). Specifically, the court must identify what marital property, as distinct from separate property, exists at the distribution date. Id. In Ogard v. Ogard, 808 P.2d 815, 819 (Alaska 1991), we distinguished between the date marital property is identified as such and the date it is valued; the latter should be as close as practicable to the date of trial. A valuation date should be chosen which will provide the most current and accurate information possible and which avoids inequitable results. It is distinct from the date marking the termination point for inclusion of property within equitable distribution. The latter date marks the end of the marital team effort. Since this date may be well in advance of the dissolution proceedings, a valuation date linked to it may result in stale financial information. L. Golden, [ Equitable Distribution of Property, ] at § 7.01 [(1983)]. Id. In Schanck v. Schanck, 717 P.2d 1, 3 (Alaska 1986), we stated the general rule for determining when property acquired after separation is properly excluded from the category of marital property: As a general rule, we hold that property accumulated with income earned after a final separation that is intended to, and does in fact, lead to a divorce is excluded from the category of marital property, as long as it is obtained without the invasion of any pre-separation marital asset. (Emphasis supplied.) In this case, the parties separated permanently in the summer of 1988. That point represented a final separation that [was] intended to, and [did] in fact, lead to a divorce. Sandra's continuing economic dependence alone does not indicate the continuance of the marital economic unit. The court's determination that the marital enterprise continued until May 11, 1990, was clearly erroneous. [2] We have required that trial courts consider payments made to maintain marital property from post-separation income when dividing marital property. Doyle v. Doyle, 815 P.2d 366, 369 n. 5 (Alaska 1991). We have not, however, held that the spouse who makes such payments must necessarily be given credit for them in the final property division. Clair argues that there are public policy reasons which require that some credit be given for such payments. He argues that not doing so tends to promote hostile relations between the parties and may result in a potential wasting of marital assets. While these arguments have some weight, it is our view that no fixed rule requiring credit in all cases should be imposed. Instead, the fact that one party has made payments from nonmarital income to preserve marital property should be considered as one of the circumstances to be weighed by the trial court in dividing the marital property. This rule is consistent with our treatment of payments made from separate property acquired prior to the marriage which are used to acquire marital property. See Chotiner, 829 P.2d at 834-35 (court did not abuse its discretion in failing to give credit for separate property contribution of husband, but on remand court was authorized to grant credit). Since the trial court erred in determining the termination date of the marital partnership, this case must be remanded. On remand the court should consider whether Clair should be given credit for contributions he made from separate property in order to preserve marital property, and should make written findings on this point.