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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Krize v. Krize (08/25/2006) sp-6037

Krize v. Krize (08/25/2006) sp-6037, 145 P3d 481

     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


ROBERT L. KRIZE, )
) Supreme Court Nos. S- 11842/11862
Appellant/Cross-Appellee, )
) Superior Court No. 4FA-04-1070 CI
v. )
) O P I N I O N
JUDY N. KRIZE, )
) No. 6037 - August 25, 2006
Appellee/Cross-Appellant. )
)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks, Mark I. Wood, Judge.

          Appearances:   Mila A. Neubert,  Neubert  Law
          Office,  LLC, Fairbanks, for Appellant/Cross-
          Appellee.  Joseph W. Sheehan, Law Offices  of
          Joseph    W.    Sheehan,    Fairbanks,    for
          Appellee/Cross-Appellant.

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

          EASTAUGH, Justice.

I.   INTRODUCTION
          Robert  and Judy Krize divorced after thirty-one  years
of  marriage.   The superior court ruled that the  future  income
from  a  long-term  lease  of  Roberts  real  property  had  been
transmuted  into marital property because Robert had arranged  to
have  the  lease  income  deposited in  the  parties  joint  bank
account.   Because  this evidence was insufficient  to  permit  a
finding  that  Robert  intended all future  lease  income  to  be
marital,  it  was  error to apply the transmutation  doctrine  to
future lease income and to classify the future income as marital.
We  consequently reverse that ruling.  We also reverse as clearly
erroneous the valuation of the parties charter boat business.  We
therefore  remand  for  further proceedings,  including  possible
consideration  of  whether equity requires  invasion  of  Roberts
separate property.
II.  FACTS AND PROCEEDINGS
          Robert and Judy Krize married in 1973 and were divorced
in 2005.
           Robert  has operated a charter boat operation  (Alaska
Viking  Cruises, or Viking) for nineteen years.  Robert and  Judy
jointly  own Viking through a corporation.  The only year  Viking
made a profit was 2004.
          Roberts income has come from investments and gifts from
his parents.  His principal source of income is a ground lease of
Fairbanks property that Roberts parents gave him in 1999.   Wells
Fargo  Bank  owns a building on Roberts land and has a  long-term
lease  on  the  property through 2025 and  an  option  to  extend
through  2074.   Only  Roberts name is on  the  deed.   The  real
property  reverts  to Robert when the lease expires.   The  lease
currently  earns  $50,000 annually and the income  will  increase
over  time.  Until the couple separated in 2004, the lease income
was  deposited  in  Robert and Judys joint bank  account,  per  a
Notice of Assignment Robert executed in 1999.
          Judy had worked in various positions with the Fairbanks
North  Star  Borough; her employment provided insurance  benefits
for  Robert.   Judy took early retirement from her job  in  1999.
Her  retirement  income is $1,115 per month;  she  also  receives
health  benefits.   Judy has medical problems that  may  make  it
difficult for her to return to work, but the superior court found
that  she  was capable of working.  She occasionally  helped  run
Viking.
          The  parties  stipulated to the value of  most  of  the
marital property, but disputed the classification or valuation of
some assets, including Viking, the lease, and two parcels of real
estate in Mexico.
          The  superior court recognized that the Fairbanks  real
property  was  Roberts  separate property,  but  determined  that
Robert  had  transmuted the income from the  lease  into  marital
property.   Although it found the present value of the  leasehold
to  be $730,000, it did not divide the present value between  the
parties, and instead awarded half the lease income to each  party
and permitted them to designate where their portion of the future
lease  income is to be deposited.  The superior court noted  that
even  if  the lease income were not marital property,  the  court
would have to reach a very disproportionate property division  or
would have to invade at least part of the lease income to balance
the economic impact of this divorce.  Robert contends that it was
error to apply the transmutation principle to the leasehold.
          The  court  valued Viking at $50,000.  Robert  disputes
that valuation on appeal.
          The  court  also  made  a comment  that,  according  to
Robert, reveals that the court inappropriately considered Roberts
future inheritance prospects when it divided the property.
III. DISCUSSION
     A.   Standard of Review
          We  review  property  division  rulings  for  abuse  of
discretion.1   Property  division is a  three-step  process:  (1)
determining  what property is available for division  as  marital
property,  (2) valuing the property, and (3) equitably allocating
the property.2  In the first step
          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.
          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.[3]
          
The  second  step,  placing a value on  property,  is  a  factual
determination  we  review  for clear  error.4   The  third  step,
equitably allocating property, we review for abuse of discretion;
we  will not disturb the allocation unless it is clearly unjust.5
We review a finding of transmutation for clear error.6
     B.   There Was Insufficient Evidence To Conclude that Robert
          Intended  To  Convert Future Lease Income into  Marital
          Property.
          
          The superior court ruled that the Fairbanks real estate
leased   to  Wells  Fargo  is  Roberts  separate  property,   but
classified the future lease income as marital.  It concluded that
because  the  lease proceeds were used for the  couples  benefit,
history  supports the finding that the lease itself  the proceeds
of  the lease were intended to be marital property.  This had the
effect  of  creating a usufructory interest in the  property  for
Judy.7   Although the court thus classified the real property  as
separate  and  classified the income as  marital,  neither  party
argues that this result was conceptually problematic.
          Instead  the issue here is whether, as Robert contends,
no  evidence justified application of the transmutation  doctrine
to the lease income to be received after divorce.  He argues that
[t]he only indication of transmutation that the court could point
to  was  that  the  monies were directed  to  the  parties  joint
checking  account.  He asserts that this evidence only  indicated
that the lease proceeds for each month were individual gifts  and
did  not  indicate an intent to make a gift of all future revenue
from  the lease.  Judy responds that Roberts notice of assignment
and  his  trial  testimony . . . demonstrate  Roberts  intent  to
change  the  lease  income  into marital  property.   Judy  cites
Roberts  trial  testimony that his father gave him  the  property
because the father understood income from the lease, would go  to
benefit  us  that is to say my wife, my son and I, by putting  it
          in our account.
          The Fairbanks property was quitclaimed to Robert by his
parents  in  1999.   Robert directed that the lease  payments  be
deposited into a joint checking account, but the deed to the real
estate  remained  in  his name only.  Robert  testified  that  he
intended the lease proceeds to be marital only while the marriage
lasted.
          Judy  never  testified that Robert told her  the  lease
income was marital.  We assume from her testimony she would  have
so testified if Robert had said any such thing.  Thus, when asked
if  she had discussions with Bob about those lease payments,  she
simply responded: Just that it was a nice secure future for us  .
.  . I had no idea that the bank lease was only in his name . . .
.   She  also testified that Bobs parents had been very  generous
with  us  throughout our marriage.  And I always assumed  it  was
just . . . another wonderful gift.  The superior court heard  her
testimony  and  did not find that Robert had told her  the  lease
income was marital.
          As   we   have  previously  explained,  [t]ransmutation
requires  intent, as demonstrated through conduct, to change  the
character  of  property  from  separate  to  marital.8   We  have
suggested  several factors to help determine intent to  transmute
property: [T]he propertys use as a marital residence; its ongoing
maintenance  and management by the parties; the  listing  of  its
title  in  joint  ownership; or the use of the non-owner  spouses
credit  to improve the property.9  In the context of a commercial
lease,  the  last three factors are potentially relevant.10   But
none of these circumstances is present here.  First, there is  no
evidence  Judy  helped manage the leased property or  the  lease.
Judys testimony indicates she did not know any of the details  of
the  lease,  and Robert testified that his father  did  not  want
anyone  but  Robert to have anything to do with  [the  property],
except  for the funds generated from it.  Second, Judy  presented
no  evidence  suggesting that her credit was used to improve  the
property.  Finally, the title to the property was never listed in
joint  ownership but only in Roberts name; since the lease itself
has no title this fact is of minor importance.
          The   testimony   of  the  parties  is   unhelpful   in
understanding  Roberts subjective intent regarding future  income
from  the lease.  Judys testimony that she merely assumed Roberts
parents  had  given  the real estate to both spouses  permits  an
inference that Robert never expressed an intention to convert the
lease into marital property.  Judys testimony is like that of the
wife in Harrower v. Harrower who  express[ed] her belief that the
[property]  would  be  part of the couples retirement.   But  she
acknowledged that [the husband] never told her that the  property
was  partly hers.11  We concluded there that the wifes subjective
belief  could not support a finding that the husband intended  to
transmute the investment property.12  We reach the same conclusion
here.
          Roberts  testimony  is  similarly  unhelpful.    Robert
presented  uncontradicted testimony that he intended the  revenue
to  be  marital property only while the marriage lasted.  But  we
have  previously stated that this kind of self-serving  testimony
          is ordinarily not probative.13  Robert also testified that his
father  wanted  income from the lease . . . to benefit  us.   But
that  testimony  does  not make it clear whether  Roberts  father
intended  to  benefit both Robert and Judy even if  the  marriage
ended.   It  is therefore unclear what Roberts subjective  intent
was  regarding the future lease income.  Robert may have intended
to share the future lease income or he may have intended to share
only current lease income as it accrued.
          Although Roberts intent may be ambiguous on this point,
his  conduct is less so.  The fact that Robert directed that  the
lease  payments be deposited in a joint account is not enough  to
show  an  intent  to transmute future lease payments  to  marital
property.14   The lease income was paid into Roberts lease escrow,
and  Robert  simply instructed the escrow agent  to  deposit  the
payments into the parties joint checking account.  Because Robert
retained  the  right to stop contributing payments to  the  joint
checking account, his actions can more realistically be viewed as
causing  periodic  gifts  of accrued income  than  as  a  blanket
assignment  of future income.  Given Roberts ambiguous statements
of intent, and his conduct suggesting periodic gifts, there is no
basis  to  infer  that  he  actually assigned  any  future  lease
proceeds.
          These circumstances are similar to those in Sampson  v.
Sampson,15  in  which  the disputed asset was  money  held  in  a
brokerage  account  only  in the husbands  name.16   The  husband
periodically used income earned from the A.G. Edwards account  to
contribute to the marriage.17  The superior court ruled that this
use of the funds transmuted the account into marital property; we
held  that  there  was  insufficient evidence  to  conclude  that
transmutation was intended.18  Simply placing funds  earned  from
separate property in a joint account, whether on a regular  basis
as here, or periodically as in Sampson, is insufficient to evince
intent  to  transmute  separate property into  marital  property.
Because  there was no evidentiary basis for the finding that  the
lease was marital, it was an abuse of discretion.
          Judy argues alternatively that even if the lease is not
marital,  Robert  is  equitably estopped from  arguing  otherwise
because he told Judy that if she quit her job he would take  care
of her.  She claims on appeal she would never have terminated her
employment with [Fairbanks North Star Borough] if Robert had told
her  that  the lease income was not marital property.   But  Judy
only  testified  that  she assumed that  the  lease  was  marital
property.  Because there is no indication that Robert misled Judy
with respect to the lease, her estoppel claim is groundless.19
          We  must therefore reverse the transmutation ruling and
remand for further proceedings.
          Our opinion resolves only the transmutation issue.   It
does  not  address the superior courts comments about  allocating
marital  assets  or  invading  the  lease  income.  Even  as   it
classified the future lease income as marital, the superior court
commented:
          [I]f  I  wouldnt  consider  [the  lease]   as
          marital property at all, it would require  me
          to do a very disproportionate division of the
          assets  in favor of Ms. Krize . . . to fairly
          allocate the economic effect of this divorce.
          Or  it would require me to invade at least  a
          portion  of  the  lease income  in  order  to
          balance the economic impact of this divorce.
          
          After  classifying property as marital or  separate,  a
trial  court  must  decide whether equity  requires  invasion  of
separate   property.     It  has  broad   discretion   under   AS
25.24.160(a)(4)  to divide property and the equitable  allocation
of  property  will not be reversed unless clearly unjust.20    On
remand, therefore, the superior court may return to steps two and
three  of  the  property  division  process  and  reconsider  the
propertys valuation and its equitable allocation.
          Robert  argues that the lease value found by the  court
was  excessive because it included the value of his  reversionary
interest  in  the land.  Our reversal moots this issue.   If  the
superior   court  determines  on  remand  that  it  is  equitably
necessary  to  invade the lease income, it should  also  consider
whether there was an error in calculating its value.
     C.   It Was Clear Error To Find Vikings Value To Be $50,000.
          
          Robert  next  argues that the superior court  erred  in
valuing  Viking.  In the superior court Robert suggested a  value
of  $10,000 and Judy suggested a value of $50,000.  The  superior
court found the value to be $50,000.
          Valuation  is  factual and will be  reversed  only  for
clear error.21  In Moffitt v. Moffitt we noted that a finding  is
clearly erroneous if it is unsupported by anything in the record.22
As  in this case, each party there expressed an opinion about the
good  will value23 of the business and the two estimates diverged
widely.   We  held that valuation must be based on  one  or  more
principled  methods  of  valuation,  not  mere  speculation,  and
concluded that the courts valuation was clearly erroneous because
it  was  unsupported by the record.24  Owners may  express  their
opinions of an assets value, but must use a principled method  of
valuation.25
          Judy asserts on appeal that the valuation technique she
used  can  be  characterized as either a  capitalization  of  net
profits or a market value.  When asked at trial how she had  come
to  the $50,000 valuation, Judy testified that Well, I just  used
the  the idea that this was an income producing asset and so only
projected  it  out for five years and came up with $50,000.   She
based this value on the fact the business had earned a profit  of
about  $10,000 the previous year, although in all prior years  it
had lost money.
          Application of the capitalization of net profits method
of  valuation  to  this  evidence does not  produce  a  value  of
$50,000.   Estimates  of profits should be based  on  an  average
year.  As one court has noted:
          The   validity  of  an  opinion  based   upon
          capitalization  of income would  depend  upon
          the  selection of an income figure which  was
          relatively stable, average and representative
          of  which there was reasonable probability of
          permanence  or persistence in the future.  An
          opinion  based  exclusively  upon  a   highly
          variable  factor  .  .  .  would  be  without
          probative value.[26]
          
Because  Judys calculation was based on an atypical, rather  than
average,  year,  an  opinion based on the capitalization  of  net
profits method of valuation is unsupported by reliable evidence.
          Judys opinion does not pass muster under the reasonable
market  value  method  of valuation, either.   Operation  of  the
company  would  have required purchase of other  assets,  so  any
calculation of the companys reasonable market value would have to
consider  necessary investments and the potential rate of  return
on  those investments.  No evidence in the record would permit  a
conclusion  that  multiplying  a  single  years  profits  without
examining the rate of return on potential capital investments can
lead to a reliable estimate of the businesss fair market value.
            The record does not indicate what method the superior
court  applied  in finding that Vikings value  was  $50,000.   It
noted  that  the value depended on an estimate of  how  well  the
tourism  industry would do and how much effort Robert  would  put
into the business.  The superior court concluded: How much profit
[Robert] can turn over time depends upon a lot of what he chooses
to  do  with it.  The superior court may have based its valuation
on  an  assumption the business was capable of making  an  annual
profit  of $10,000.  But the only evidence potentially supporting
a  value  of $50,000 was Judys flawed opinion.  Consequently,  no
reliable  evidence  in the record supports the courts  valuation.
It  would  have  been error either to accept  as  accurate  Judys
speculation about the value of Vikings good will, or  to  base  a
valuation  on a speculative assumption that Viking would  realize
stable  future profits given the evidence of business  losses  in
all but one year.
          We  therefore reverse the finding of Vikings value.  In
determining Vikings value on remand, the court should explain its
method of valuation.
     D.    The  Superior  Court Did Not Err  by  Considering  the
Likelihood of       Future Inheritance.

          Robert  argues  that  the superior court  impermissibly
assumed  Robert was going to inherit a large sum  of  money,  and
then  relied  on this assumption in dividing the property.   Judy
argues that because the court is required to consider each partys
financial  condition,  it  was proper to  note  Roberts  expected
inheritance.  It is unclear whether the court gave any weight  to
a  possible inheritance when it divided the property.  Because we
are  remanding, and because the issue may arise again on  remand,
we choose to address it.
          Our  analysis of this question necessarily begins  with
the  pertinent statutory language. Alaska Statute 25.24.160(a)(4)
requires that the superior court consider
          (A)    the length of the marriage and station
          in life of the parties during the marriage;
          (B)  the age and health of the parties;
          (C)   the  earning capacity of  the  parties,
          including   their  educational   backgrounds,
          training,     employment     skills,     work
          experiences, length of absence from  the  job
          market,  and  custodial responsibilities  for
          children during the marriage;
          (D)   the financial condition of the parties,
          including the availability and cost of health
          insurance;
          (E)   the  conduct of the parties,  including
          whether there has been unreasonable depletion
          of marital assets;
          (F)   the desirability of awarding the family
          home,  or  the  right to live  in  it  for  a
          reasonable period of time, to the  party  who
          has primary physical custody of children;
          (G)    the  circumstances and necessities  of
          each party;
          (H)   the  time and manner of acquisition  of
          the property in question;  and
          (I)   the  income-producing capacity  of  the
          property and the value of the property at the
          time of division.[27]
          
          The  requirement  that  the trial  court  consider  the
circumstances and necessities28 of each party is fairly broad and
open-ended.  Being named as beneficiary in a parents  will  could
be considered a circumstance of a party.  Moreover, the financial
condition  of the parties29 might encompass each partys long-term
financial condition.
          The  language of the statute  the fact that the factors
are all phrased in the present tense  suggests that the court  is
to   look   only  to  present  financial  condition  and  present
circumstances and necessities.  But being named a beneficiary  in
a  will could be treated either as a present circumstance or as a
future interest which may or may not ever vest.
          Because  the  statutory language does not  explain  how
future  inheritance should be regarded in the context of property
division,  we  examine the issue according to generally  accepted
common law principles.
          Our  previous cases do not provide an answer.  Our only
previous  case to discuss this general topic concerned a superior
courts denial of a request to change an alimony order.  We  there
explained:
          Homer maintains that changes in circumstances
          since   the   judgment   was   entered   make
          prospective   application  inequitable.    He
          asserts   that   Teresa   is   expecting    a
          substantial inheritance from her  mother  and
          argues that the court should have taken  this
          into  account before dismissing  his  motion.
          Teresas inheritance, however, is not a  fact.
          Its  occurrence is speculative and  therefore
          does not represent a changed circumstance.[30]
          
          Our   statement   about  the  speculative   nature   of
inheritance in Burrell is not determinative here because  alimony
is  unlike property division in an important way.  Since  alimony
is  ongoing, either party can ask the court for a change if there
is  a  significant change of circumstances; in that  context  the
court  can  wait  until a future interest  vests.   But  property
divisions once final cannot normally be reopened.31
          Whether   it   is   proper   to  consider   prospective
inheritance  in  a  property  division  dispute  is  a  difficult
question  that has split American jurisdictions.   A majority  of
American  jurisdictions  regards  expected  inheritance  as   too
uncertain to be used as a factor in property division.32   But  a
substantial minority of jurisdictions permits or requires  courts
to  consider  inheritance as a factor in determining each  partys
financial condition upon separation.33
           One  leading  treatise asserts that it  is  better  to
permit  trial  courts  to  consider  the  possibility  of  future
inheritance when the inheritance is fairly certain:
          Where  the  beneficiary remains on  generally
          good  terms  with the donor, and particularly
          where  the  donor is a parent or other  close
          family  member, it is a rare case  where  the
          expected  gift or inheritance will completely
          fail  to  yield  any benefits  at  all.   The
          better position, therefore is that the  court
          may  consider an expected gift or inheritance
          as   one  relevant  factor  in  dividing  the
          marital estate.
          
               Of  course, the weight of a future  gift
          or  inheritance as a division  factor  should
          depend  heavily upon the degree of likelihood
          that benefits will actually be received.[34]
          
          Turners  preference contains some limitations  on  when
prospective inheritance should be considered.  Robert argues that
permitting  inquiry  into  potential  inheritances  would  be   a
slippery slope that would swamp the courts with inquiry into  the
wills  and  trusts  of not only parents (as in  this  case),  but
aunts,   uncles  and  the  like.   An  absolute  prohibition   on
considering prospective inheritance is unwarranted, but we  think
any  such  consideration (1) must be limited to immediate  family
members,  (2) must be limited to inheritances that are  not  just
possible  but virtually certain, and (3) must treat the  prospect
as  simply  one  factor and not give it inordinate  weight.   The
likelihood   of  inheritance  should  not  lead  to   a   greatly
disproportionate  division  of  assets;  but  if  inheritance  is
virtually  certain,  the  court  may  give  it  some  weight   in
considering how to divide the property.
           We  therefore  conclude  that  it  is  not  inherently
improper  for a court to consider the possibility of  inheritance
in  some  cases.   Because property divisions cannot be reopened,
however, courts must be cautious in using this factor.
          On remand, the court should permit further discovery on
this  issue  and  on the extent to which Roberts  interests  have
vested.  Interests that have already vested may be considered  as
an  asset of the beneficiary when the superior court divides  the
property.
     E.   The Property Division Did Not Unfairly Favor One Party.
          Robert argues that the superior court erred in awarding
a  disproportionate amount of income-producing  assets  to  Judy.
Robert  notes  that  if neither he nor Judy works  he  will  have
income of $28,000 while Judy will have income of $40,000.  Robert
had  testified  that he wanted and intended to continue  working,
and the superior court assumed an income from the cruise business
of  at least $10,000 a year.  Because the superior court may need
to  recalculate the division based on the non-marital  status  of
the  ground  lease  as  well  as the revaluation  of  the  cruise
business, Roberts objection to the current division (which may be
substantially modified on remand) is moot.
          Robert  also  argues  that granting  Judy  one  of  the
parties two Mexican Rancho Migrino lots was erroneous.  First, he
argues  it was erroneous because [t]he only explanation  for  the
courts  decision to split the lots is that the court  incorrectly
presumed Robert had a better financial picture than Judy, because
he  stood  to inherit his mothers estate.  Judy argues  that  the
absence of a valuation made the division necessary, otherwise the
court  could  not  be  sure there was a  fair  overall  division.
Although  the superior court did not explicitly state its  reason
for  dividing  the parcels, the courts comments suggest  that  it
thought  the  fairest division was an equal  division  given  the
uncertain value of the parcels.  We do not think that method  was
erroneous under the circumstances.  On remand, the superior court
may  need to require a more accurate valuation if it is necessary
for proper division.
          Robert also argues that Judy had agreed before trial to
let  Robert have both Rancho Migrino properties; in exchange  she
would receive the Club Cascadas timeshare.  (The stipulated value
of  the timeshare was $50,000, and the original agreed-upon value
of  the  two Rancho Migrino lots was $59,400.)  Judy then changed
her  mind, asking for both Rancho Migrino lots and the timeshare.
Robert  argues that the superior court should have  followed  the
parties  agreement rather than awarding one of the Rancho Migrino
properties to Judy.
          Judys   pretrial   property  distribution   spreadsheet
indicates  that  the parties had agreed that both Rancho  Migrino
lots  would go to Robert.  At trial, however, Judy testified that
a  real estate agent in Cabo San Lucas had told her the value  of
Rancho  Migrino  lots had increased dramatically; Judy  therefore
asked the court to award both Rancho Migrino lots to her.
          We  assume  Judys  pretrial spreadsheet  reflected  the
agreement  Robert describes.  But we have held that  courts  need
not  accept  property settlements as controlling when  the  facts
indicate  an  agreement  was not made with full  understanding.35
Robert  agrees  that  the  lots  were  never  properly  valuated.
Because the properties had not been professionally appraised  the
parties were uncertain of the value.  The original agreement  was
certainly not made with full understanding and the superior court
did  not  abuse  its discretion by failing to hold  Judy  to  the
pretrial understanding.  The superior court therefore was  within
its discretion in granting Judy one of the Rancho Migrino lots.
          Robert  further argues that it was error to  distribute
          the property without a proper valuation because Judys decision to
back  out of her deal was based on her unsupported allegation  of
increased  value.   He argues that he could  not  contradict  her
assertion of increased value because he chose not to appraise the
property in reliance on Judys promise to let him have both Rancho
Migrino lots.  But Robert did not raise these arguments at trial.
          In  a  divorce  proceeding the  trial  court  has  wide
discretion  in deciding how to structure the property division,36
but  a  court must be especially careful if it appears  that  one
party  has  unfairly  manipulated the process.   Robert  did  not
object  to  Judys testimony that she had been told  the  property
value  had  increased,  even though her  testimony  was  arguably
hearsay.   Neither  on cross-examination nor at closing  argument
did  Roberts  attorney suggest that Judys assertion of  increased
value  was inaccurate.  And in closing arguments Roberts attorney
did  not suggest that Judy had unfairly tricked him into forgoing
a  proper valuation.  Robert instead argued at closing that  Judy
had  agreed  to let him have both Rancho Migrino properties,  and
that  because  the land was undeveloped it was better  suited  to
Robert than Judy.  Given Roberts failure to contest the issue  of
increased  value,  and  his failure to argue  that  he  had  been
induced  to  forgo  valuation in reliance on Judys  promise,  the
superior  court had no reason to believe that deviating from  the
parties   original   agreement  was   inequitable.    Under   the
circumstances  including the fact that there had been  no  proper
valuation  of the property  the superior court acted  within  its
discretion  in  awarding one of the Rancho Migrino properties  to
Judy.
          Finally, Robert argues that the superior court erred by
not  taking into account the cost of his health insurance, a cost
he  estimates to be $6,000 per year or more.  Judy counters  that
there  was no evidence of cost and suggests that Roberts estimate
is  exaggerated.  Alaska Statute 25.24.160(a)(4)(D) requires  the
court  to  consider the availability and cost of health insurance
when  dividing property.  The divorce decree awarded Robert $1.00
of  Defendant  Judy  N. Krizes PERS benefits, so  that  Plaintiff
Robert  L.  Krize qualifies to purchase health insurance  through
the   PERS  program.   The  court  therefore  did  consider   the
availability  and  cost  of health insurance  when  dividing  the
property.   It  made an award that will help ensure  that  Robert
will  be  able  to obtain affordable insurance.  Robert  has  not
demonstrated  that his health care needs cannot  be  met  by  the
award  of  marital  property, or that  failure  to  give  greater
consideration to the health care insurance issue was erroneous or
clearly unjust.  But because the cost of Roberts health insurance
remains  uncertain  and  because we  are  remanding  for  further
proceedings, on remand Robert may offer evidence of his insurance
cost.   The  superior  court  should  take  that  evidence   into
consideration in its final division of property.
IV.  CONCLUSION
          For  these reasons the judgment is VACATED and the case
is REMANDED for further proceedings in accord with this opinion.
_______________________________
     1     Malone  v.  Malone, 587 P.2d 1167, 1167 (Alaska  1978)
(noting the court has broad discretion [to divide property] which
will  be  interfered  with  on appeal  only  in  cases  of  clear
injustice).

     2    Sampson v. Sampson, 14 P.3d 272, 275 (Alaska 2000).

     3     Hansen  v.  Hansen, 119 P.3d 1005, 1009 (Alaska  2005)
(quoting Lewis v. Lewis, 785 P.2d 550, 558 (Alaska 1990)).

     4     Id.  (citing  Moffitt v. Moffit,  749  P.2d  343,  346
(Alaska 1988)).

     5    Id.

     6    Id. at 1013.

     7     Usufructory is derived from the noun, usufruct,  which
is [t]he right of using and enjoying and receiving the profits of
property  that  belongs to another.  Blacks Law  Dictionary  1544
(6th ed. 1990).

     8    Schmitz v. Schmitz, 88 P.3d 1116, 1125 (Alaska 2004).

     9     Harrower  v. Harrower, 71 P.3d 854, 858 (Alaska  2003)
(holding  that  shares of stock in husbands  name  had  not  been
transmuted)  (citing  Green v. Green, 29 P.3d  854,  858  (Alaska
2001)).

     10    See Sampson, 14 P.3d at 276 (noting that although first
factor only applies to real property, other factors may apply  to
both real and personal property).

     11    Harrower v. Harrower, 71 P.3d 854, 858 (Alaska 2003).

     12    Id.

     13    Abood v. Abood, 119 P.3d 980, 986 (Alaska 2005).

     14    We assume the individual lease payments became marital
property  when  they were deposited into the joint bank  account.
See  Abood,  119 P.3d at 987 (noting that separate  property  may
become  marital  if  it is inextricably commingled  with  marital
property).   But the question here is not whether  money  already
deposited in the joint account was marital, but whether the right
to receive future lease payments was marital.

     15    Sampson v. Sampson, 14 P.3d 272 (Alaska 2000).

     16    Id. at 274.

     17    Id.

     18    Id. at 276.

     19     Equitable  estoppel results from an  assertion  of  a
position, expressly or by implication, which is reasonably relied
on  by  the  opposing party to his detriment.  Bibo  v.  Jeffreys
Rest., 770 P.2d 290, 293 (Alaska 1989).

     20     Keturi v. Keturi, 84  P.3d at 408, 412 (Alaska  2004)
(quoting  Harrelson  v.  Harrelson, 932  P.2d  247,  250  (Alaska
1997));  see  also  Silvan v. Alcina, 105 P.3d 117,  123  (Alaska
2005)  (The  superior  court  has broad  discretion  to  make  an
equitable  division  of  property; this  court  will  overturn  a
division only if it is clearly unjust.).

     21    Rice v. Rice, 757 P.2d 60, 62 (Alaska 1988).

     22    Moffitt v. Moffitt, 749 P.2d 343, 347 (Alaska 1988).

     23    Good will value is the amount by which the market value
of  a  going  concern  exceeds the total value  of  its  tangible
assets.   Principles  of the Law of Family Dissolution:  Analysis
and  Recommendations  4.07 cmt. d (2002).  The  business  has  no
tangible  assets.   The  tour boat (M/V Valhalla)  is  titled  as
personal, not corporate, property and the parties agree that  its
value is $185,000.

     24     Moffitt, 749 P.2d at 347-48.

     25      An owner may express an opinion about the value of an
asset  (see  Schymanski v. Conventz, 674 P.2d  281,  286  (Alaska
1983)), but the owner must still use a proper method of valuation
before  a  court can rely upon the owners opinion in  a  property
division  case.   See Moffitt, 749 P.2d at 347.   Judys  argument
that  Robert failed to object to her opinion of value misses  the
point.  The issue is not whether her opinion was admissible  into
evidence  (in  which  case failure to object would  matter),  but
whether  the  evidence  was legally sufficient  for  purposes  of
valuation.

     26     Shelby  County R-IV Sch. Dist. v. Herman, 392  S.W.2d
609, 614 (Mo. 1965).

     27     The legislative intent provides little guidance as to
interpretation of this section.  The intent section  of  the  Act
states  that  the factors codified are intended  to  restate  the
principal  factors found in case law, not to change them,  affect
the  interpretation  given  to  them,  or  preclude  changes   or
additions to them by other court rulings.  Ch. 130,  1, SLA 1990.

     28    AS 25.24.160(a)(4)(G).

     29    AS 25.24.160(a)(4)(D).

     30    Burrell v. Burrell, 696 P.2d 157, 166 (Alaska 1984).

     31     See  Lowe  v. Lowe, 817 P.2d 453, 456  (Alaska  1991)
(noting that once property division is incorporated into a  final
judgment  relief  may be granted only within  the  parameters  of
Civil Rule 60(b)).

     32     See,  e.g.,  Colo.  Rev. Stat. Ann.   14-10-113(7)(b)
(2005) ( [A]n asset of a spouse shall not include any interest  a
party  may have as an heir at law of a living person .  .  .  nor
shall   any   such  interests  be  considered  as   an   economic
circumstance  or other factor.); Rubin v. Rubin, 527  A.2d  1184,
1191  (Conn. 1987) (To base a division of property, which is  not
ordinarily  subject to modification, upon the  possibility  of  a
future inheritance might often prove to be unfair in the light of
subsequent events.); McCloskey v. McCloskey, 359 So. 2d 494,  496
(Fla.  App. 1978) (noting [s]aid inheritance is supposed to  come
to  her  by will when an elderly aunt dies, but the wife may  die
first,  wills  can be re-written, or the aunt may make  an  inter
vivos disposition of the stock); In re Marriage of Ellinwood, 651
P.2d  190,  193 (Or. App. 1982) (noting that expected inheritance
is  so  uncertain as to justify its exclusion in the division  of
marital property).

     33    See, e.g., Iowa Code  598.21(1)(i) (2005) (noting that
in  equitable  division  trial  court  should  consider  economic
circumstances of each party including pension benefits, vested or
unvested, and future interests); Atkinson v. Atkinson, 32  S.W.3d
41,  46  (Ark. App. 2000) (noting the fact that appellant  is  an
only  child  and  potential  heir to a one-million-dollar  estate
coupled  with  the  fact  that  he was  the  beneficiary  of  the
aforementioned trust certainly suggests that he has opportunities
for  further  acquisition of capital assets and income  that  are
unavailable  to  appellee); In re Marriage of  Benz,  518  N.E.2d
1316,  1324  (Ill. App. 1988) (noting that there is generally  no
error where a court considers a future or anticipated inheritance
when  distributing  property because statute  requires  court  to
assess  opportunity  of  each spouse for  future  acquisition  of
assets and income).

     34     2 Brett R. Turner, Equitable Distribution of Property
6.91 (3d ed. 2005).  But Turners analysis appears to be based  on
a  typical  statute which is quite different  from  Alaskas.   He
states that most statutes speak of likelihood not certainty.  Id.
AS  25.24.160 does not mention the likelihood of acquiring future
assets  but  appears  to  be  more  present-oriented  than   many
statutes.   See, e.g., Iowa Code  598.21(1)(i) (2005)  (directing
courts to consider even unvested future interests as part of  the
economic circumstances of each party).  Turners analysis is  less
convincing in Alaska than it might be in other jurisdictions.

     35    Ford v. Ford, 68 P.3d 1258, 1263 (Alaska 2003) (quoting
Notkin v. Notkin, 921 P.2d 1109, 1112 (Alaska 1996)).

     36    Silvan v. Alcina, 105 P.3d 117, 124 (Alaska 2005).

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