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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Hansen v. Hansen (09/02/2005) sp-5939

Hansen v. Hansen (09/02/2005) sp-5939

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


KARL HANSEN, )
) Supreme Court No. S- 11053
Appellant, )
) Superior Court No. 3AN-00-8957 CI
v. )
) O P I N I O N
MADA HANSEN, )
) [No. 5939 - September 2, 2005]
Appellee. )
)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Stephanie E. Joannides, Judge.

          Appearances:  G.R. Eschbacher, Anchorage, for
          Appellant.   Lawrence A.  Pederson,  Paul  J.
          Nangle & Associates, Anchorage, for Appellee.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          EASTAUGH, Justice.

I.   INTRODUCTION
          I.   Karl and Mada Hansen divorced in 2002, and the superior
court  divided their assets following trial.  Karl raises various
property division issues on appeal.  We affirm as to most of  the
rulings  challenged by Karl.  But we reverse the ruling that  one
of  Karls  IRAs was a wholly marital asset, because  we  conclude
that  Karl  funded at least part of this account with  premarital
assets.   We  also reverse the ruling that Karls  T.  Rowe  Price
account was a marital asset, because we conclude that Karl funded
this  account with premarital assets.  And we vacate  the  ruling
that  all of Madas post-retirement health insurance benefits  are
her  separate property, because we conclude that she used marital
assets to repurchase benefits she earned before the marriage  and
that  they have value to Mada.  We remand for further proceedings
as  to  the  IRA,  the  T.  Rowe Price account,  and  the  health
insurance benefits.  We affirm the property division order in all
other respects.
II.  FACTS AND PROCEEDINGS
          Mada and Karl Hansen began living together in 1986  and
married in June 1989.  Mada filed a complaint for divorce on July
24,  2000.   Throughout  the divorce proceedings  they  lived  in
separate  areas  of  the marital home until  Karl  moved  out  on
October 10, 2002.  They both paid bills associated with the home.
The  superior court found that even though [Mada and  Karl]  were
heading   toward  divorce,  they  continued,  for  all  practical
purposes,  to live as a marital unit.  The superior court  issued
the divorce decree on October 22, 2002.
          No  children were born or adopted of the marriage,  and
Karl  and Mada are both in relatively good health and capable  of
working.   Karl  is  a  self-employed civil  engineer  with  Cold
Regions   Technology,  Inc.  (Cold  Regions)  and  is  its   sole
shareholder.   He  has earned, and continues to earn,  more  than
Mada,   reporting income of $93,000 on his 2000 tax  return.   He
also  has a longer work-life expectancy because he is seven years
younger  than  she  is.  Mada is an engineer  technician  at  the
Municipality of Anchorage and earns $34,344 per year.
          The  superior courts October 2002 findings of fact  and
conclusions of law  entered following trial found that
          Karl managed all the finances.  Sometimes  he
          transferred  money  from  accounts  in  their
          individual  names to accounts in  only  Karls
          name.   It  is  difficult to  trace  all  the
          money.   It  is clear from the way the  money
          was   transferred  and  used  that   it   was
          commingled  and that some of it was  used  to
          improve the marital home. . . .  I find  that
          Karls financial transfers during the marriage
          do  not  make sense and raise some  questions
          about the use of the funds and the source  of
          some  of  the money in accounts he  does  not
          satisfactorily explain.
          
The  court  also  stated that [i]t is difficult to  determine  if
there  has been an unreasonable depletion of the marital  assets.
It  appears that Karl may have made some poor decisions about the
amount  of  money he borrowed and spent on remodeling the  house.
The  court  found  that  the parties funds  were  commingled  and
transmuted into marital property.  For these reasons and  because
of  their disparate earning potentials, the court decided that  a
60/40  distribution in Madas favor is just.  The court classified
and divided the parties property.
          Karl  unsuccessfully  moved for reconsideration.   Karl
appeals  with respect to rulings regarding the following  assets:
(1)  Cold Regions; (2) the marital residence; (3) post-separation
payments;  (4) the Alaska USA account; (5) two IRA accounts;  (6)
the  T.  Rowe  Price  account;  and (7)  Madas  health  insurance
benefits.
III. DISCUSSION
     A.   Standard of Review
          In  property  division cases we determine  whether  the
trial  court  abused  the  discretion  vested  in  it  under   AS
25.24.160(a)(4).1  Dividing the property is a three-step process.2
First,  the trial court must determine what property is available
for  distribution, characterizing the property as either separate
or  marital,  a  determination  we  review  under  the  abuse  of
discretion standard.  An abuse of discretion occurs if the  court
considers  improper factors, fails to consider relevant statutory
factors, or assigns disproportionate weight to some factors while
ignoring   others.3   Marital  property  includes  all   property
acquired  during  the marriage excepting only inherited  property
and  property acquired with separate property which  is  kept  as
separate  property.4  We apply our independent  judgment  to  any
questions of law.5
          Second,  the  trial court must place  a  value  on  the
property, a ruling which is a factual determination reviewed  for
clear error.6  To reverse for clear error, we must be left with a
definite and firm conviction on the entire record that a  mistake
has been made.7
          Third,  the  trial  court must equitably  allocate  the
property,  a ruling which we review under the abuse of discretion
standard; we will not disturb the allocation unless it is clearly
unjust.8
          The trial court has broad discretion in considering the
following  factors, among others, in allocating marital property:
(1)  the  parties earning abilities; (2) the parties stations  in
life;  (3)  the  parties circumstances and necessities;  (4)  the
parties  physical  conditions and health;  and  (5)  the  parties
financial  circumstances,  including  the  time  and  manner   of
acquisition of the property at issue, its value at the time,  and
any income producing capacity.9
     B.   The Court Did Not Clearly Err in Valuing Cold Regions.
          
          Madas  expert, Francis Gallela, and Karls  expert,  Ted
Sherwin,  testified  regarding the value of  Cold  Regions.   The
superior  court  found  Gallelas testimony  more  persuasive  and
valued Cold Regions at $96,236.
          Karl  argues that the superior court erred, because  it
did not give a sufficient explanation for its finding.  He argues
that  because Cold Regions is primarily a one-person corporation,
the  value of its goodwill plays a significant role in its value.
He  contends  that Gallela was unable to separate Karls  goodwill
from  Cold  Regionss goodwill and was unable  to  determine  Cold
Regionss  marketability.  Therefore, he argues, Gallelas estimate
of value is of little practical use.
          Karl   argues   that   Sherwin,  a   certified   public
accountant, considered Cold Regionss marketability and  goodwill.
Sherwin found an absence of marketable goodwill; Karl argues that
the  goodwill  was his own and is therefore not  marketable.   He
contends  that  the  court erroneously made  no  finding  whether
goodwill  existed and whether it could be sold to  a  prospective
          buyer.  Karl argues that Sherwin conducted a more thorough
investigation than Gallela and concluded that the corporation was
going  down  hill fast and was worth $36,000.  Karl  argues  that
Sherwins  determination of Karls salary was  more  accurate  than
Gallelas and that Gallelas capitalization-of-earnings method  was
flawed.
          Mada  points out that Gallela used a capitalization-of-
earnings  approach to value the business, while Sherwin  used  an
asset-based  approach.   Mada points out that  the  business  had
several  employees  and a contract worth  $272,000,  as  well  as
fairly  good  prospects for more work; thus, Sherwins  conclusion
that  Karl was the company was erroneous.  Mada argues  that  the
business had goodwill and that it was marketable.
          Valuing  goodwill is a two-step process.10  First,  the
trial  court must decide whether goodwill exists.11  If  goodwill
does  exist,  the court must then determine whether it  could  be
sold to a prospective buyer.12  If the goodwill is not marketable,
then  no value for goodwill should be considered in dividing  the
marital  assets.13  Second, if there is marketable goodwill,  the
court  should  determine  its value using  one  or  more  of  the
principled methods of valuation.14  The capitalization-of-earnings
approach  Gallela used is an acceptable method.15  The existence,
marketability, and calculation of goodwill present  questions  of
fact, which we will set aside only for clear error.16
          The   superior  court  picked  a  value  that   Gallela
determined  using  an acceptable method, and  Gallelas  testimony
does  not  clearly  state  that any of  the  value  he  found  is
goodwill.   The  superior  court  could  have  been  clearer   in
explaining  how it arrived at the value it adopted.  In  Lang  v.
Lang we remanded a property division case to the trial court, but
there  the trial court failed to make any findings regarding  the
value of the property distributed.17  Despite the lack of specific
findings in this case, the record, particularly in light  of  the
superior  courts  conclusion concerning the  credibility  of  the
expert witnesses, when viewed as a whole does not leave us with a
definite  and  firm  conviction that the superior  court  made  a
mistake.   We  cannot say that the courts decision regarding  the
value of Cold Regions was clearly erroneous.18
     C.   The  Court  Did Not Clearly Err in Valuing the  Marital
          Residence.
          
          The  superior court found that $365,000 was  the  as-is
value  of  the  house,  including all the uninstalled  items  and
building materials.  Karl argues that the court offered no  facts
from which it arrived at this figure.  He contends that an expert
valued  the  house  at  $365,000  and  the  uninstalled  building
materials inside the house at $22,000.  He argues that the  court
did not address the value of the uninstalled items.
          But, as Mada points out, her appraiser valued the house
at  $340,000, including the unincorporated materials.   She  also
correctly asserts that Karls appraiser stated that $25,000 was  a
valid  price range divergence.  The court, therefore, could  have
arrived at its valuation of $365,000 in several ways, namely,  by
using Madas appraisers opinion and adding the price range, or  by
          taking Karls appraisers finished value ($515,000) and subtracting
the  cost  of completion ($150,000).  She argues that the  courts
finding is, therefore, not erroneous, and falls within the  range
of  evidence presented at trial.19  We agree.  The superior court
valued  the  house  within  the range of  figures  given  by  the
experts.20  It did not clearly err in choosing this value.
     D.   The  Court Did Not Abuse Its Discretion in Refusing  To
          Credit Karl for Post-Separation Payments.
          
          The   superior  court  found  that  both  parties  made
substantial post-separation payments to preserve marital  assets,
with   Karl   paying  approximately  twice  as  much   as   Mada.
Recognizing that Karl earns significantly more than Mada and that
the  parties  continued to live in the marital  home,  the  court
decided not to give either party credit for these payments.   The
court  also  took these payments into account in determining  the
appropriate overall division of the marital property.
          Karl argues that the court erred in refusing either  to
grant credit to him or to reduce his marital debt accordingly for
the  $59,889.07 in post-separation payments he made  to  preserve
martial  assets.   Karl  points out that  the  parties  lived  in
separate  areas  of the home until he moved out  on  October  10,
2002.  He argues that the court incorrectly decided that (1)  the
parties  remained a marital enterprise until entry of the October
22, 2002 divorce decree and (2) everything that Mada and Karl had
earned  until  then was marital property.  He  contends  that  in
Ramsey  v.  Ramsey we stated that a trial court may not  conclude
that  parties continue to function economically as a marital unit
after  the date of separation just because one of the parties  is
economically  dependent on the other.21   Karl  argues  that  his
presence in the marital residence, without more, does not justify
declaring all payments marital property and denying credit to the
payer.  He contends that the filing of a divorce complaint and an
answer, as well as physical separation to distinct areas  of  the
home,  should  be enough to declare an end to the  marital  unit.
Karl  also  points out that he was absent from the  parties  home
more than he was there.
          No  single rule defines when a couple ceases to be  one
economic  unit.   Each  case  must be  judged  on  its  facts  to
determine when the marriage has terminated as a joint enterprise.22
Generally, 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.23  Likewise, the date for marking the termination
point  for  including  property  in  the  marital  assets  should
correspond to the end of the marital team effort.24  For example,
this  could  be  when the parties separate, when  one  files  for
divorce, or when the court enters the divorce decree.25
          Trial  courts must consider payments made  to  maintain
marital   property  from  post-separation  income  when  dividing
marital property.26  But they need not necessarily give credit in
the final property division to the spouse making the payment.27
          The  parties here lived in separate parts of  the  same
          house and shared house expenses.  Thus, we agree with Mada that
the  superior  court  could permissibly  find  that  the  parties
continued to live as a marital unit until the date of the divorce
decree.   Case  law does not require the trial  court  to  credit
either party for their post-separation payments,28 and the  court
gave  clear reasons for its decision.  We therefore conclude that
the  court  did not abuse its discretion in declining  to  credit
Karl for these payments.
     E.     The T. Rowe Price Account and One of the IRA Accounts
          Are Not Marital Property, but the Other Accounts Are.
          
          Karl argues that the superior court erred by failing to
find  that  three financial accounts were his separate  property.
Mada  argues  that  the  court correctly  determined  that  these
accounts were marital.
          1.   Alaska USA account
          Karl  had an Alaska USA account, and the superior court
found that two deposits had been made into it, $8,000 on May  19,
2001 and $6,000 on August 4, 2001.  It concluded that because the
parties  agreed  to value marital assets as of the  date  of  the
trial and because they continued to live in the marital home  and
made  payments to preserve marital assets, the money then in  the
Alaska  USA account was a marital asset.  It also found that  the
time  of  the divorce decree, October 22, 2002, is the time  when
the  income  earned after the final separation  became  severable
from  marital  property.  It reached this  decision  because  the
financial transactions Karl conducted and the source of funds  in
several accounts made it difficult to identify the source of many
of the funds.
          Karl argues that it was an abuse of discretion for  the
court  to  conclude  that monies earned and  deposited  in  Karls
account  after  Mada  filed  for divorce  are  marital  property,
because  no evidence shows that the parties intended to  function
as  a marital enterprise after that time.  He contends that it is
not  enough  that  he  and Mada continued to occupy  the  marital
residence;  without  more  this is  not  evidence  of  a  marital
enterprise.
          But,  as  explained above in Part III.D, the court  did
not err in finding that the parties lived as a marital unit until
entry   of  the  divorce  decree.   As  Mada  argues,  the  court
determined  that the two deposits were marital property,  because
it  found  that the parties continued to function  as  a  marital
unit.29
          The  court  therefore did not abuse its  discretion  in
characterizing  the  deposits made before entry  of  the  divorce
decree as marital assets.30
          2.   IRAs
          Karl acquired several IRAs during the marriage.  As  to
two  of  these  accounts, the superior court  found  that  as  of
September 30, 2001 IRA A had a value of $6,981.04 and IRA B had a
value of $41,830.91.31  It found that these IRAs were rolled over
on  August 13, 1991 and May 23, 2000, respectively, and held them
to be marital assets.  It found that the asset balance was rolled
over  during  the  marriage  and  found  that  the  constant  re-
          characterization (by rolling over and/or redepositing into
different  accounts) of the separate funds  and  income  of  both
parties supported characterizing these assets as marital.
          Karl  contends  that  he  and  Mada  had  separate  IRA
accounts, although Karls were rolled over after they married.  He
claims that during the marriage the parties contributed $3,500 to
Karls  IRA and $3,500 to Madas IRA.  Karl asserts that the  court
erred  when it classified these two IRAs as marital, because  all
funds  within  these  IRAs other than the  $3,500  deposits  were
either  premarital or accruals attributable to premarital  funds.
He  argues that the court could not divide this property  without
finding that the assets were co-mingled or transmuted or  that  a
balancing of the equities requires such a result,32 yet it made no
such findings.
          Mada points out that Karl testified that IRA A received
some  contributions during the marriage.  Karl stated that  these
were  rollovers from his other premarital IRAs, but  Mada  showed
that  between $67,000 and $121,000 of Karls marital earnings  had
not  been  deposited  into marital funds  or  trackable  separate
funds.   Mada argues that the court could infer that the  missing
funds, not premarital funds, were the source of the deposits made
during the marriage.
          Property that was once separate may be transmuted  into
marital property if its owner intended to do so.  Intent  may  be
demonstrated  through  words and actions.33   [P]lacing  separate
property in joint ownership is rebuttable evidence that the owner
intended  the property to be marital.34  We review a  finding  of
transmutation for clear error.35
          As  the  superior  court explained, it  concluded  that
these  IRAs became marital property as a result of Karls  rolling
over  and  redepositing funds.  Although it did not  specifically
mention  transmutation in reference to these accounts, the  court
did  find  that the parties funds in general were commingled  and
transmuted  into  marital property.  The court  did  not  discuss
specifically  how these rollovers and redeposits demonstrated  an
intent to transmute separate property into a marital asset.
          There is no evidence any funds deposited in IRA A  were
marital, other than the $3,500 Karl concedes he deposited  during
the  marriage.   There was no evidence of transmutation,  and  we
agree  with Karl that it was an abuse of discretion to treat  the
entire   account   as   marital.   We   therefore   reverse   the
characterization  that  this account  was  entirely  marital  and
remand  for  determination of the value of  the  $3,500  and  the
interest  it  accrued;  this portion of the  account  is  marital
property.  The rest of IRA A is nonmarital property.
          We need not remand with regard to Madas Alaska USA IRA,
with  a  value of $2,287.45.  Because Mada contributed $3,500  to
this account, the entire IRA is marital property, as the superior
court correctly found.
          Karl argues that IRA B, like his other IRA, is separate
[personal] property.  There was no evidence, either by  testimony
or  exhibit,  that IRA B was premarital property.   We  therefore
agree  with  Mada  that  the superior court  did  not  abuse  its
discretion in treating this account as marital.
          3.   T. Rowe Price account
               
          Karl  had  a  T.  Rowe Price account with  a  value  of
$30,179 as of September 30, 2001.  The superior court found  that
although  this  account may have been premarital,  it  lost  that
characterization when Karl applied the cash in the account toward
the marital residence.
          Karl  argues  that because he funded this account  with
premarital  earnings, the court erroneously characterized  it  as
marital.   He also contends that the court erroneously relied  on
an  account  balance  statement dated September  2001,  when  the
parties  were cohabiting, but had filed for divorce.   He  argues
that  if  the court intended to invade Karls property to  balance
the equities, it did not state this intention.36
          Mada points out that this account contained $13,564  in
1990 and $38,268 at the beginning of 2001.  She argues that there
was  no  explanation for the increase in value and  that  it  was
Karls burden to explain this increase.37  Mada argues that she had
shown  that  a  large  amount of money Karl received  during  the
marriage  had  not  been  deposited  into  the  parties  account;
therefore,  the  court could infer that Karl contributed  marital
funds  to this account.  This, she claims, would justify  finding
that  the  account  was marital due to active appreciation.   She
also argues that Karl used half of the funds in this account  for
a marital purpose, to renovate the house, transmuting the account
into a marital asset.
          Separate  property  may become marital  through  either
transmutation, as described above, or active appreciation,  which
occurs
          when marital funds or marital efforts cause a
          spouses  separate  property  to  increase  in
          value  during the marriage.  In  contrast  to
          transmutation,   which  converts   an   asset
          completely  from separate to marital,  active
          appreciation recognizes that a separate asset
          can become partly marital by growing in value
          during  the course of a marriage.  Under  the
          latter  theory,  the  assets  value  at   the
          inception   of  the  marriage   retains   its
          separate   character,  but   any   subsequent
          increase  in  value  is  treated  as  marital
          property  to the extent that it results  from
          active   marital  conduct:  Appreciation   in
          separate property is marital if it was caused
          by   marital   funds   or  marital   efforts;
          otherwise it remains separate.[38]
          
To decide that active appreciation took place
          the   court   must   make  three   subsidiary
          findings.   First,  it  must  find  that  the
          separate  property  in  question  appreciated
          during  the marriage.  Second, it  must  find
          that  the  parties made marital contributions
          to  the  property.  Finally, the  court  must
          find  a causal connection between the marital
          contributions  and  at  least  part  of   the
          appreciation.[39]
          
The  burden  of proving marital contributions and an increase  in
value  is on the party who seeks to classify the appreciation  as
active.40   The  burden of proving that the marital contributions
did not cause the increase in value rests with the party who owns
the asset.41
          The  superior  court  did  not  clearly  state  whether
transmutation  or  active appreciation made this  asset  marital.
Using part of a premarital account for a marital purpose does not
change  the balance of the account into marital property so  long
as no new contributions of marital funds to the account are made.
Karl  testified that there were no contributions to  the  account
during  the marriage.  Furthermore, this type of account  is  not
normally subject to active appreciation.42  We therefore conclude
that  the  increase in value resulted from passive  appreciation,
and  that  the account remained premarital property.  Because  it
was  an  abuse of discretion to classify this account as marital,
we reverse the ruling as to this account and remand.
     F.   Madas  Post-Retirement  Health  Insurance  Benefit   Is
          Partly Marital Property.
          
          Mada  had  a  PERS defined benefit retirement  account,
which  she both earned and cashed out before the marriage.   Mada
bought back her PERS account with marital funds and agreed to its
characterization  as  marital property valued  at  $48,358.   The
superior court found that she also acquired, as part of the  PERS
benefit  package,  lifetime health insurance benefits  that  Karl
cannot share.  It found that this benefit was the result of Madas
premarital  efforts, but that there was insufficient evidence  to
determine  the  amount of marital assets used to repurchase  this
asset.  The court also found that even if the health benefits had
been acquired with marital funds, there was no evidence that Karl
could have used the benefits had the parties remained married.
          Karl, citing AS 25.24.160(a)(4) and Kinnard v. Kinnard,43
argues that because the health insurance benefits were reacquired
using  marital funds, they should have been treated as a  marital
asset.   He asserts that their value is $85,762 and that  it  was
error not to credit him with at least half the benefits value.
          Mada  disagreed  with Karls experts  valuation  of  the
health  benefits, and asserts that they are not  alienable.   She
also contends that no evidence was presented as to the amount  of
funds required to buy back the retirement and health benefits, or
what the proportionate cost of each would have been.  Mada argues
that  the  coverage has no cash value and that  the  trial  court
correctly ruled that it was not subject to allocation.
          Health  insurance benefits earned during  the  marriage
are  a  marital asset of the insured spouse.44  That the benefits
cannot    be   transferred   is   irrelevant,   because    market
transferability  is not a prerequisite to determining  value  for
property division purposes.45  In Martin v. Martin we dealt with a
similar  issue involving frequent flyer miles.46  The miles  were
          non-transferrable, but an asset need not be marketable if the
court can objectively determine that it has value to its owner.47
We therefore held that the superior court correctly characterized
the frequent flyer miles as a marital asset.48
          By  using  marital  funds  during  the  marriage,  Mada
reacquired  the  post-retirement health  insurance  benefits  she
earned  before the marriage; the benefit is, therefore, at  least
in  part a marital asset.  As Karl argues, the benefit has  value
to  Mada,  and the court should have determined this  value.   We
therefore vacate the ruling as to this asset and remand.
          On  remand  Madas  retirement health insurance  benefit
should be divided into marital and nonmarital portions.49   Courts
in  other  jurisdictions have approved the division of particular
property into marital and nonmarital portions.50
          Only  the  marital  portion of  the  retirement  health
insurance  benefit is divisible between Mada and  Karl;  benefits
Mada  has earned since the marriage ended are not marital.   This
is because post-divorce, pre-retirement health insurance benefits
are  compensation for contemporaneously performed  work  and  are
therefore  separate  property,  whereas   post-retirement  health
insurance   benefits   are  compensation  for   work   previously
performed.51  In this case, when Mada eventually retires, some of
that  work will have been performed during the marriage and  some
of  it will have been performed after the marriage.  For purposes
of  valuing Madas retirement health insurance benefit,  work  she
performed  before  the marriage must be treated  as  having  been
performed during the marriage because Mada used marital funds  to
buy back this part of the benefit.
          The  court  should  determine  the  percentage  of  the
benefit  that is marital by calculating the coverture fraction.52
This  fraction  is  calculated by dividing the  number  of  years
worked  during  the period of coverture by the  total  number  of
years worked.53  To the extent Mada used marital funds to buy back
health  benefits  for  work performed before  the  parties  began
living  together, that period of work must be treated as part  of
the period of coverture.
          Our  holding  should not be read to  suggest  that  the
proceeds  from  health  insurance are marital  property.54   When
valuing  the  retirement health insurance benefit,  the  superior
court  should look to the amount of the premium subsidy  provided
by  the employer, rather than to either the proceeds or the  cost
of procuring comparable insurance.55
          There  are  inherent  difficulties  in  attempting   to
calculate the value of this  benefit.  Because Mada had  not  yet
retired at the time of trial, the evidence in the record makes it
impossible  to  know  with certainty how  many  years  Mada  will
ultimately  work.  It is therefore impossible to  calculate  with
certainty the percentages of marital and nonmarital interests for
the post-retirement health insurance benefit.   Likewise, because
we  cannot know how long Mada will live, the total value  of  the
employers premium subsidy cannot be calculated with certainty.
          Despite  these uncertainties, sufficient  evidence  was
presented  in  this  case  to place in issue  the  value  of  the
retirement health care benefit; accordingly, the court on  remand
          must exercise its discretion in fashioning an equitable division
of this benefit.56  It may, in its discretion, receive additional
evidence relevant to the value of the benefit.
IV.  CONCLUSION
          We  REVERSE the property division order as to IRA A and
the  T.  Rowe  Price account, VACATE the order as to  the  health
insurance  benefits,  and REMAND for further  proceedings  as  to
those  property items.  We AFFIRM the property division order  in
all other respects.
_______________________________
     1     Moffitt  v.  Moffitt (Moffitt I), 749  P.2d  343,  346
(Alaska 1988).

     2    Id.

     3    West v. West, 21 P.3d 838, 841 (Alaska 2001).

     4    Lewis. v. Lewis, 785 P.2d 550, 558 (Alaska 1990).

     5    Id.

     6    Moffitt I, 749 P.2d at 346.

     7    Martens v. Metzgar, 591 P.2d 541, 544 (Alaska 1979).

     8    Moffitt I, 749 P.2d at 346.

     9    Miles v. Miles, 816 P.2d 129, 131 (Alaska 1991).

     10    Moffitt I, 749 P.2d at 347.

     11    Id.

     12    Id.; see also Manelick v. Manelick, 59 P.3d 259, 262-63
(Alaska 2002).

     13    Moffitt I, 749 P.2d at 348.

     14    Id. at 347-48.

     15     Pattee  v.  Pattee, 744 P.2d 658, 661 (Alaska  1987),
overruled on other grounds by Nass v. Seaton, 904 P.2d  412,  416
n.7 (Alaska 1995).

     16    See Moffitt v. Moffitt (Moffitt II), 813 P.3d 674, 676
(Alaska  1991);  Manelick, 59 P.3d at 263-64.  We  disapprove  of
Richmond v. Richmond, 779 P.2d 1211, 1213 (Alaska 1989),  to  the
extent it is inconsistent with reviewing for clear error.

     17    Lang v. Lang, 741 P.2d 1193, 1196 (Alaska 1987).

     18     Rausch v. Devine, 80 P.3d 733, 737 (Alaska 2003) (The
trial courts findings regarding the credibility of witnesses  and
weighing  of  the  evidence  may  be  reversed  only  if  clearly
erroneous.   In reviewing the trial courts factual  findings,  we
view  the  evidence  in  the light most favorable  to  the  party
prevailing in the trial court.) (internal citations omitted).

     19    Harrower v. Harrower, 71 P.3d 854, 862 (Alaska 2003).

     20    Berg v. Berg, 983 P.2d 1244, 1249 (Alaska 1999).

     21    Ramsey v. Ramsey, 834 P.2d 807, 809 (Alaska 1992).

     22    Bays v. Bays, 807 P.2d 482, 486 (Alaska 1991) (quoting
Schanck v. Schanck, 717 P.2d 1, 3 (Alaska 1986)).

     23    Schanck, 717 P.2d at 3.

     24     Ogard  v.  Ogard,  808 P.2d 815,  819  (Alaska  1991)
(original emphasis).

     25    Schanck, 717 P.2d at 3 & n.7.

     26    Ramsey, 834 P.2d at 809.

     27    Id.

     28    Id.

     29    Schanck, 717 P.2d at 3 & n.7.

     30     See  Lundquist v. Lundquist, 923 P.2d 42, 47  (Alaska
1996).

     31    For ease of discussion and to avoid disclosing personal
information, we refer to the two disputed IRAs as IRA A  and  IRA
B.

     32    AS 25.24.160(a)(4); Green v. Green, 29 P.3d 854, 857-58
(Alaska 2001).

     33    Green, 29 P.3d at 857.

     34    Chotiner v. Chotiner, 829 P.2d 829, 833 (Alaska 1992).

     35    Green, 29 P.3d at 859.

     36     See  Nicholson v. Wolfe, 974 P.2d  417,  424  &  n.26
(Alaska  1999) (noting that without finding that parties intended
to treat premarital property as marital property, the trial court
would  be  justified  in dividing the . . .  assets  only  if  it
specifically found that a balancing of the equities  between  the
parties  required invasion of the pre-marital holding)  (internal
quotation omitted).

     37    Harrower v. Harrower, 71 P.3d 854, 859 (Alaska 2003).

     38     Id.  at 857-58 (internal citations omitted)  (quoting
Brett R. Turner, Equitable Distribution of Property  5.22, at 230
(2d ed. 1994) [hereinafter Turner]).

     39    Id. at 858 (internal citation  omitted).

     40    Id. at 859 & n.11.

     41    Id. at 859 & n.12.

     42    See In re the Marriage of Gottsacker v. Gottsacker, 664
N.W.2d  848,  853  (Minn. 2003) ([A]n increase in  the  value  of
nonmarital property attributable to inflation or to market forces
or conditions, retains its nonmarital character.) (citing Nardini
v. Nardini, 414 N.W.2d 184, 192 (Minn. 1987)).

     43    Kinnard v. Kinnard, 43 P.3d 150, 156 (Alaska 2002).

     44    Id.

     45    Martin v. Martin, 52 P.3d 724, 731 (Alaska 2002).

     46    Id.

     47    Id.

     48    Id.

     49     See Walek v. Walek, 749 N.Y.S.2d 383, 386 (N.Y.  Sup.
2002)  (holding  that  health  insurance  coverage  component  of
husbands  retirement  benefits  was  marital  asset  subject   to
equitable distribution).

     50    See, e.g., Lampton v. Lampton, 721 S.W.2d 736, 738 (Ky.
App.  1986)  (dividing particular stock holding into marital  and
nonmarital  portions); Doucette v. Washburn, 766 A.2d  578,  581,
587  (Me.  2001)  (dividing pension into marital and   nonmarital
portions); Hoffman v. Hoffman, 614 A.2d 988, 998 (Md. Spec.  App.
1991)  (remanding to determine the correct values of the  marital
and  nonmarital  portions  of a particular  property);  Poach  v.
Poach,  392  N.W.2d  749, 752-756 (Minn.  App.  1986)  (valuating
marital  and  nonmarital portions of asset); Hall  v.  Hall,  118
S.W.3d  252, 259 (Mo. App. 2003) (stating that trial court should
separate  pension into marital and nonmarital portions); Coughlin
v.  Coughlin,  823 S.W.2d 73, 75 (Mo. App. 1991)  (dividing   IRA
into  marital  and nonmarital portions); Sutliff v. Sutliff,  522
A.2d  1144,  1150  (Pa. Super. 1987) (dividing  particular  stock
holding into marital and nonmarital portions).

     51     Brett  R. Turner, Equitable Distribution of  Property
6.26 (2d ed. Supp. 2004) [hereinafter Turner Supplement].

     52    See Turner, supra note 38 at  6.10.

     53     Id.

     54    Turner Supplement, supra note 51 at  6.26.

     55    See id.

     56    We note that Turner discusses principles governing the
distribution of analogous retirement benefits.  See Turner, supra
note  38 at  6.11 (Methods for Distributing Retirement Benefits).
Given  the  difficulty of valuing and dividing retirement  health
insurance benefits and because the method of distribution has not
been  briefed  in  this case, we express no  preference  for  any
particular method.