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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Burts v. Burts (12/2/2011) sp-6619

Burts v. Burts (12/2/2011) sp-6619

        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, email 


LEON BURTS,                                       ) 
                                                  )   Supreme Court No. S-13822 
                       Appellant,                 ) 
                                                  )   Superior Court No. 3AN-09-09152 CI 
        v.                                        ) 
                                                  )   O P I N I O N 
ANN BURTS,                                        ) 
                                                  )   No. 6619 - December 2, 2011 
                       Appellee.                  ) 

               Appeal from the Superior Court of the State of Alaska, Third 
               Judicial District, Anchorage, Mark Rindner, Judge. 

               Appearances:  Roy V. Williams, Eagle River, for Appellant. 
               Timothy P. Peters, Law Office of Timothy P. Peters, LLC, 
               Anchorage, for Appellee. 

               Before:    Carpeneti, Chief Justice, Fabe, Winfree, Christen, 
               and Stowers, Justices. 

               CHRISTEN, Justice. 


               Leon Burts, a retired military service member, filed for divorce in 2009. 

The superior court valued Leon's post-retirement military health insurance benefit as a 

marital asset and allocated it to Leon.         Leon appeals, arguing that the benefit is too 

speculative to be valued and that state courts are preempted from treating this type of 

federal benefit as a marital asset.   We affirm the superior court's characterization of this 

----------------------- Page 2-----------------------

benefit   as   marital   property,   but   conclude   the   court's   valuation   was   erroneous. We 

remand for reconsideration of the value of this benefit. 


                Leon Burts joined the military on February 15, 1979.  He married Ann five 

years later and they had a son in 1989.           The family moved numerous times over the 

course of Leon's military service, ultimately settling in Anchorage in 1993. Ann worked 

as a part-time dental assistant before the family moved to Anchorage.   After the family 

moved to Anchorage, Ann stayed home with their son for six years, then resumed part- 

time work.   She also worked full-time for approximately three years.  Leon retired from 

the military in March 1999 after 20 years of service and 15 years of marriage.   He 

subsequently obtained two new jobs: one as a civil service employee servicing airplanes 

and one as an assembler at Walmart. 

                As a military retiree with over 20 years of service, Leon receives TRICARE 
health insurance.1  The basic plan, called TRICARE Standard, has a $150 deductible with 

no   annual   enrollment   fee;   coverage   is   automatic   for   all   military   retirees.2 For   an 

additional annual premium, a military retiree may upgrade to TRICARE Prime, which 
has no deductible and reduced out-of-pocket costs for services.3             This is the policy that 

Leon carried at the time of the divorce.   At age 65, Leon will transition to TRICARE for 

        1       See   TRICARE     COSTS,         (last 

visited Nov. 28, 2011). 

        2       See id.; see also  DEP 'T   OF  DEFENSE, TRICARE  STANDARD  HANDBOOK  7 

(2010),      available       at 
Standard_HB_10_LoRes.pdf ("Enrollment is not required for TRICARE Standard . . . 
there are no enrollment forms to fill out and no enrollment fees."). 

        3       See    TRICARE    COSTS,         (last 

visited Nov. 28, 2011). 

                                                 -2-                                            6619

----------------------- Page 3-----------------------

Life, which is a Medicare wraparound policy with no annual enrollment fees aside from 
Medicare Part B premiums.4 

                Leon also receives health care through the United States Department of 

Veterans   Affairs   (VA).     When   Leon   retired   from   military   service   in   1999,   veterans 

without disabilities were still eligible for VA health care.   In 2003, VA health care was 

amended to provide care only for those service members with disabilities or below- 
average incomes for their communities.5            Leon enrolled for VA health care before the 

2003 amendment, but he also has a 20% disability rating.               Ann's expert, Sheila Miller, 

testified that Leon's VA health care benefit is worth the same as, if not more than, his 

TRICARE benefit. 

                Leon   also   has   a   military   pension   and   a   Federal   Employee   Retirement 

System (FERS) pension. 

        4       See DEP 'T OF DEFENSE, TRICARE FOR LIFE HANDBOOK  1 (2010), available 

a  t     h  t  t  p  :  /  /  w  w  w  .  t  r  i  c  a  r  e  .  m  i  l  /  t  r  i  c  a  r  e  s  m  a  r  t  f  i  l  e  s  / 

        5       See Changes to the Priority Group 8 Enrollment Restriction, U.S. DEP 'T 

O  F      V   E  T E  R  A  N   S     A   F  F A   I R  S  (  S e  p  t   .    1 5  ,      2 0  0  9  )  , 
gibility/PG8Relaxation.asp; VA to Offer Health Care to Previously Ineligible Veterans, 
U . S .     D E P  ' T     O F    V E T E R A  N S      A F F A I R S     ( J a n .     8 ,    2 0 0 9 ) ,                   In 2009 the military re- 
expanded the limits to provide veteran's care to some non-disabled veterans with above 
average   incomes   (10%   above   average   or   less).       Changes   to   the   Priority   Group   8 
Enrollment       Restriction,    U.S.   DEP 'T    OF  VETERANS       AFFAIRS      (Sept.    15,   2009), 
gibility/PG8Relaxation.asp.  The average income in 2010 for Anchorage was $45,100. 
2010   GMT   Tables   for   Priority   Groups   1-7   for   the   State   of   Alaska,   U.S. DEP 'T   OF 
(last visited Nov. 28, 2011). 

                                                   -3-                                             6619

----------------------- Page 4-----------------------

               Ann   resumed   working   full-time   in   September   2009,   but   she   does   not 

receive health coverage from her employer.  Ann was eligible for one year of TRICARE 
coverage post-divorce,6 but she will have to obtain her own private health insurance 

               The parties' son, Tyler,7 has special needs.         Although he is no longer a 

minor, a neuropsychological evaluation indicated that Tyler was   likely incapable of 

independent living at the time of the divorce.          Tyler is covered by Leon's TRICARE 

insurance, which Leon agreed to continue providing until Tyler reaches age 23 - the 

maximum       age   Leon   believed   he   could  provide    medical   coverage    for  him   under 


               Leon filed for divorce on July 28, 2009. The superior court ordered a 50-50 

split of the marital portion of Leon's military pension (less disability pay) and a 50-50 

division of his FERS pension.         The superior court also characterized 75% of Leon's 

TRICARE insurance as a marital asset because the parties were married for 15 of Leon's 

20 years of military service.      The superior court valued this military health insurance 

benefit at $125,959 based on a report produced by Sheila Miller, and it allocated this 

value to Leon in its property division. The superior court awarded Ann the marital home 

and the marital portion of the Thrift Savings Plan (TSP) Leon earned during his federal 


               The superior court observed that its distribution resulted in Ann receiving 

approximately 62% of the marital estate and Leon receiving 38%, but these percentages 

do not include the 50-50 division of the marital portion of Leon's military and FERS 

        6      A "20/20/15" former spouse like Ann (20 years of marriage, 20 years of 

military service, and 15 years of overlap) is entitled to remain on TRICARE for only one 
year following divorce.      10 U.S.C.  1072(2)(G), (H) (2006). 

        7      We use a pseudonym to protect the parties' son's privacy. 


----------------------- Page 5-----------------------

pensions.    When these marital pensions are factored in, the overall property division is 

closer to 57% and 43% respectively.             The superior court found its distribution to be 

equitable given the parties'   unequal earning capacity, respective circumstances, and 

Ann's need to keep the marital home because she would be caring for the parties' son. 

                Leon   appeals   the   superior   court's   characterization   and   valuation   of   his 

TRICARE   benefit   as   a   marital   asset.     He   also   appeals   the   superior   court's   overall 

division of the marital estate. 

                Dividing marital property is a three-step process.8         First, the trial court must 

determine what property is available to distribute and characterize it as either marital or 
separate.9    We ordinarily review this step for abuse of discretion, but if it concerns a 

question of law we review the determination using our independent judgment.10  Second, 

the   trial  court   must    value   the  property.11     We     review    a  superior   court's   value 

determination for clear error, which exists when we are "left with a definite and firm 
conviction on the entire record that a mistake has been made."12                Third, the trial court 

        8       Hansen v. Hansen, 119 P.3d 1005, 1009 (Alaska 2005) (citing Moffitt v. 

Moffitt, 749 P.2d 343, 346 (Alaska 1988)). 

        9       Id. 

        10      Id. (internal citations omitted). 

        11      Id. (citing Moffitt, 749 P.2d at 346). 

        12      Id. (citing Martens v. Metzgar, 591 P.2d 541, 544 (Alaska 1979)). 


----------------------- Page 6-----------------------

must equitably allocate the marital estate, taking into account specified factors.13                We 

review the allocation of marital property for abuse of discretion.14 


                Leon   argues   the   superior   court   erred   by   characterizing   his   TRICARE 

benefit   as   a   marital   asset   and   in   calculating   TRICARE's   value. He   also   claims   the 

marital assets were not distributed equitably.         We discuss each argument in turn. 

        A.	     The Superior Court Did Not Err In Characterizing Leon's TRICARE 
                Benefit As Marital Property. 

                We have repeatedly recognized that "[h]ealth insurance benefits earned 
during the marriage are a marital asset of the insured spouse,"15 but we have not yet 

specifically addressed the characterization of military health insurance benefits.                Leon 

argues that this type of health insurance benefit should be treated differently from other 

types    of  health   insurance    benefits   because    military   benefits   are:    (1)  subject    to 

congressional      discretion    and  thus   too  speculative    to  be  valued;   and   (2)  federally 

authorized, and state courts are therefore preempted from considering them in marital 

property divisions. 

                1.	     TRICARE is not too speculative to be valued. 

                Leon   argues   that   the   superior   court   should   not   have   characterized   his 

TRICARE benefit as a marital asset because the future of this benefit is uncertain.  He 

argues that because military health insurance is funded by the Department of Defense 

        13      See AS 25.24.160(a)(4); see also Hansen, 119 P.3d at 1009 (citing Moffitt, 

749 P.2d at 346). 

        14      Hansen, 119 P.3d at 1009 (citing Moffitt, 749 P.2d at 346). 

        15      Id. at 1015 (citing Kinnard v. Kinnard, 43 P.3d 150, 156 (Alaska 2002)); 

see also Ethelbah v. Walker, 225 P.3d 1082, 1087-90 (Alaska 2010); Sparks v. Sparks, 
233 P.3d 1091, 1097 (Alaska 2010) (citing Hansen, 119 P.3d at 1015). 


----------------------- Page 7-----------------------

budget, and because the Department of Defense budget has to be re-appropriated by 

Congress each year, Congress could eliminate TRICARE at any time.                    Leon claims 

congressional discretion makes the benefit too speculative to be considered as a marital 

               In support of his argument, Leon first relies on Schism v. United States.16 

In Schism, the United States Court of Appeals for the Federal Circuit addressed whether 

military retirees are contractually entitled to free lifetime medical care.         The court held 

they are not, explaining that:   "[b]enefits for retired military personnel . . . depend upon 

an exercise of legislative grace, not upon principles of contract, property, or 'takings' 
law."17  Schism did not discuss whether the future of this type of benefit is "speculative," 

but Ann's expert testified that while "[t]here have been permutations of the plan, . . . 

fundamentally free health care as a part of participation in the military forces during and 

after service is a concept that has been adhered to since the 1880s."            Leon offered no 

competing evidence on this point.        In our view, the future of a program that has been 

approved by Congress for over 120 years is not too speculative to be characterized as a 

marital asset.   Further, to the extent Leon is arguing that potential future changes make 

TRICARE   too   speculative,   we   observe   that   benefits   in   Alaska's   Public   Employees' 

Retirement     System     (PERS)    and   Teachers'    Retirement    System    (TRS)    have   been 

        16     316 F.3d 1259 (Fed. Cir. 2002). 

        17     Id.  at 1268 (citing Zucker v. United States, 758 F.2d 637, 640 (Fed. Cir. 



----------------------- Page 8-----------------------

significantly modified and restructured in the past,18 but we allow those benefits to be 

characterized as marital assets for purposes of property division.19 

                Federal pensions, like military health benefits, have been described as being 
subject   to   congressional   discretion,20    yet   state   courts   routinely   characterize   military 

pensions as marital property and award marital shares of them under the Uniformed 
Services Former Spouses' Protection Act (Former Spouses' Protection Act).21                     Indeed, 

the superior court characterized Leon's military pension as a marital asset in this case. 

Brought to its logical conclusion, Leon's argument that his military health benefit is too 

speculative to be considered a marital asset implies that military pensions cannot be 

characterized      as  such   either  because    they   are  also   dependent     upon   congressional 

appropriations.  Such a ruling would ignore the intent of the Former Spouses' Protection 
Act22   and our past precedent.23       Leon has offered no rationale to justify distinguishing 

military health benefits earned during the course of a marriage from military pensions 

earned during the course of a marriage. 

        18      See About   the   Division   of   Retirement   and   Benefits,   ALASKA      DEP 'T    OF 

ADMIN . RET. & BENEFITS, (last visited Nov. 
28, 2011). 

        19      See, e.g., Ethelbah, 225 P.3d at 1087-90; Hansen, 119 P.3d at 1015. 

        20      Schism, 316 F.3d at 1272 (quoting Lynch v. United States, 292 U.S. 571, 

577 (1934)) ("Pensions . . . are gratuities. . . .  The benefits conferred by gratuities may 
be redistributed or withdrawn at any time in the discretion of Congress."). 

        21      See, e.g.,  Young v. Lowery, 221 P.3d 1006, 1011 (Alaska 2009) ("State 

courts have limited authority to equitably divide a military pension upon divorce."); see 
also Former Spouses' Protection Act, 10 U.S.C.  1408 (2006). 

        22      See infra notes 60-61 and accompanying text. 

        23      Young, 221 P.3d at 1011. 


----------------------- Page 9-----------------------

                Finally, Leon compares this case to In re Marriage of Ellis, where a city 

employer was paying 100% of the employee's health insurance premiums, subject to 
redetermination each year.24       When the employee divorced, the California court held the 

subsidies were not community property because, in part, "there is nothing in the plan that 

guarantees [the employee] will either always receive a subsidy in a specific amount, or 
the subsidy will always equal the premium for available coverage."25                Leon contends the 

holding in Ellis suggests that discretionarily provided health plans are too speculative to 

be marital assets. 

                At the outset, we note Ellis is a case from the California Court of Appeals; 
it is not binding precedent in Alaska.26        Further, California follows community property 

laws to determine divorce distributions, but Alaska uses a statutory scheme of equitable 
division codified in AS 25.24.160(a)(4).27           Moreover, part of the Ellis court's rationale 

for excluding the subsidy from the marital estate was the court's observation that "the 
right to subsidized health insurance is not convertible to cash."28           In Alaska, we have said 

that   "market   transferability   is   not   a   prerequisite   to   determining   value   for   property 

        24       124 Cal. Rptr. 2d 719 (Cal. App. 2002). 

        25      Id. at 725. 

        26      See Kott v. City of Fairbanks, 661 P.2d 177, 182-83 (Alaska 1983) ("The 

precedential authority referred to is a series of cases from other jurisdictions, which are 
not binding upon this court."). 

        27      See    Clauson       v.  Clauson,      831    P.2d    1257,    1262     (Alaska     1992) 

(distinguishing community property states, like California, from equitable distribution 
states, like Alaska, though both are restricted from dividing veterans' disability benefits 
received in place of waived retirement pay). 

        28      Ellis, 124 Cal. Rptr. 2d at 724 (discussingIn re Marriage of Havins, 50 Cal. 

Rptr. 2d 763, 766 (Cal. App. 1996)). 


----------------------- Page 10-----------------------

division purposes" so long as the court can "objectively determine that [the property] has 
value to its owner."29	  Leon's TRICARE benefit can be objectively valued,30 and Ann's 

expert provided such a valuation in this case.            We conclude that TRICARE is not too 

speculative   to   be   characterized   as   marital   property   simply   because   it   is   subject   to 

congressional appropriation. 

                2.	     State courts are not preempted from considering TRICARE in 
                        marital property divisions. 

                The superior court characterized Leon's TRICARE benefit as a marital 

asset and allocated it to Leon in its division of marital property.  The superior court did 

not transfer any part of the benefit to Ann, but Leon argues that federal law preempts 

state courts from characterizing a TRICARE benefit as a marital asset. 

                Under the Supremacy Clause of the United States Constitution, state law 
must   yield   if   it   conflicts   with   federal   law.31 The   United   States   Supreme   Court   has 

recognized two "touchstones" of preemption jurisprudence: 

                First, the purpose of Congress is the ultimate touchstone in 
                every pre-emption case. . . . Second, in all pre-emption cases, 

        29      Hansen v. Hansen, 119 P.3d 1005, 1015 (Alaska 2005) (concluding health 

insurance benefits may be valued as marital property); see also Martin v. Martin, 52 P.3d 
724, 731 (Alaska 2002) (holding non-transferable frequent flyer miles to be marital 

        30      See TRACY  FOOTE, MILITARY  DIVORCE  TIPS 17 (2010) ("An accountant 

specializing in health costs [can] be hired to place a net present value on [the full military 
health   care]   loss.");  MARK    E.  SULLIVAN , THE      MILITARY     DIVORCE      HANDBOOK         522 
(American Bar Association, 2006) ("[TRICARE] can be evaluated by an expert, and this 
value   can   be   allocated   to   [the   military   spouse]   as   part   of   the   retirement   benefits   he 

        31      Allen v. State, Dep't of Health & Soc. Servs., Div. of Pub. Assistance, 203 

P.3d 1155, 1161 (Alaska 2009) (citing State v. Dupier, 118 P.3d 1039, 1049 (Alaska 


----------------------- Page 11-----------------------

                and particularly those in which Congress has legislated in a 
                field which the States have traditionally occupied, [courts] 
                start with the assumption that the historic police powers of 
                the State were not to be superseded by the Federal Act unless 
                that was the clear and manifest purpose of Congress.[32] 

The United States Supreme Court recognizes a presumption against preemption in areas 
of traditional state regulation, such as family law.33            We have similarly recognized a 

presumption against federal preemption of state law.34 

                There     are   three  types   of  federal   preemption      that  can   overcome     this 
presumption:       "express,"35    "field,"   and   "conflict"   preemption.36      Leon   first   invokes 

"field" preemption, arguing that the laws passed to effectuate TRICARE are extensive 

and leave no room for state regulation.   Field preemption occurs when "the federal law 

governing a particular area is so comprehensive and so complete that Congress is said 
to have completely occupied a field, leaving no room for state law."37                   Our court has 

explained that "[w]e 'will not infer an intent to occupy the field where Congress has left 

        32       Wyeth v. Levine, 129 S.Ct. 1187, 1194-95 (2009) (internal quotation marks, 

alterations, and citations omitted). 

        33      Egelhoff   v.   Egelhoff   ex   rel.   Breiner,   532   U.S.   141,   152   (2001)   (citing 

Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979)). 

        34      Allen , 203 P.3d at 1160 (internal citations omitted). 

        35      Express preemption occurs when Congress "explicitly declares an intent to 

preempt state law in a particular area."          Id. at 1161. Leon does not allege that express 
preemption applies. 

        36      Id. (citing Dupier, 118 P.3d at 1049). 

        37      Id. 


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some room for state involvement.' "38            Although Congress has not directly addressed 

awards      of  military   health   insurance    benefits   in  the  context    of  domestic     property 

divisions, it has addressed the states' role in dividing military pensions   through the 
Former Spouses' Protection Act.39            Under this federal law, "a [state] court may treat 

disposable retired pay to a [service] member . . . either as property solely of the member 

or   as   property   of   the  member     and   his   spouse  in  accordance     with   the  law   of  the 
jurisdiction of the court."40      States consequently retain the ability to determine how to 

characterize disposable retired pay in property division cases.              Because Congress "left 

some room for state involvement" in distributing some military retirement benefits, we 
do not infer an intent to completely occupy this field.41 

                 Leon   also   raises   a   conflict preemption   argument.       Conflict   preemption 

occurs   when   "a   state   law   and   a   federal   law  are   in   conflict"   either: (1)   "because 

compliance with both state and federal law is impossible"; or (2) "because the state law 

stands     as  an  obstacle    to  accomplishment       and   execution    of  the  full  purposes     and 
objectives of Congress."42        Leon briefly mentions Mansell v. Mansell43  to support his 

preemption argument.          We explained the procedural history surrounding Mansell in 

Young v. Lowery: 

        38      Id. (quoting Dupier, 118 P.3d at 1050). 

        39       10 U.S.C.  1408 (2006). 

        40      Id. at  1408(c)(1).      But "[t]he total amount of the disposable retired pay 

of a member payable [to the former spouse] . . . may not exceed 50 percent of such 
disposable retired pay."  Id. at  1408(e). 

        41      Allen , 203 P.3d at 1161. 

        42      Id. at 1162 (internal quotation marks and citations omitted). 

        43       490 U.S. 581 (1989). 


----------------------- Page 13-----------------------

                The     United    States   Supreme     Court    held   in McCarty       v. 
                McCarty   that   federal   law   on   military   pensions   preempted 
                state   domestic   relations   law   and   barred   state   courts   from 
                treating military retired pay as marital property divisible upon 
                divorce.  The following year Congress overruled McCarty by 
                passing the Uniformed Services Former Spouses' Protection 
                Act (USFSPA), allowing state courts to treat a portion of a 
                service member's military retired pay - termed "disposable 
                retired   pay"-   as   marital   property   divisible   upon   divorce 
                according to state domestic relations law. . . .  After Congress 
                passed the USFSPA the Supreme Court ruled in Mansell v. 
                Mansell    that   a  state  court   may    consider    only   USFSPA- 
                defined disposable retired pay as marital property divisible 
                upon divorce.  Accordingly, a court may not equitably divide 
                total retired pay; it may equitably divide only the amount of 
                retired pay remaining after the court deducts waived retired 
                pay and the cost of purchasing survivor benefits.[44] 

In his closing argument in the superior court, Leon urged the court to rule that Mansell 
prevented the award of his Veterans Administration health care benefit;45 he did not 

claim that Mansell  prohibited the superior court's characterization of his TRICARE 

benefit as a marital asset.   Leon's preemption argument regarding his TRICARE benefit 

relied   solely   on   the  congressional   purpose      of  the  TRICARE        program.    We     have 

repeatedly held that   "[i]ssues not properly raised or briefed at trial are not properly 
before this court on appeal."46      Further, "where a point is given only a cursory statement 

        44      221 P.3d 1006, 1011 (Alaska 2009) (internal citations omitted). 

        45      Leon   argued:   "Inasmuch   as   [Leon's]   medical   treatment   is   through   the 

[V]eterans [A]dministration it would appear that the court does not have the authority to 
make an award based on a valuation placed on care by the Veterans Administration." 

        46      Hagans, Brown & Gibbs v. First Nat. Bank of Anchorage, 783 P.2d 1164, 

1166 (Alaska 1989) (citing Wickwire v. McFadden, 633 P.2d 278 (Alaska 1981)). 


----------------------- Page 14-----------------------

in the argument portion of a brief, the point will not be considered on appeal."47                   Leon 

mentions Mansell  in his opening appellate brief to show that he raised a preemption 

claim below, and that he therefore did not waive his right to bring a preemption claim on 

appeal.    But Leon does not explain how Mansell applies to TRICARE benefits - nor 

does his brief mention Mansell again.  Because Leon's reference to Mansell goes strictly 

to   his   VA   care,   not   TRICARE,   he   waived   any   argument   that Mansell  prohibits   the 

characterization of TRICARE as a marital asset. 

                 Even if Leon had preserved this argument, we find McCarty, Mansell, and 

their progeny to be of little assistance in our decision.  McCarty, Mansell, and Young all 

concerned   the  division   of   a   service   member's   military pension .          The   state   court   in 

McCarty ordered a retired military member to pay his former spouse "that portion of his 

total monthly pension or retirement payment which equals one-half (½) of the ratio of 

the total time between marriage and separation during which [the military member] was 

in the United States Army to the total number of years he had served with the . . . Army 
at   the   time   of   retirement."48  Similarly,   the   parties'   property   settlement   in  Mansell 

provided that the service member would pay his former spouse 50% of his total military 

retirement   pay,   including   the   portion   of   retired   pay   he   waived   in   order   to   receive 
disability benefits.49    And the trial court in Young awarded one-half of the marital portion 

of the service member's total retired pay to his former spouse, including the retired pay 

        47       Adamson v. Univ. of Alaska , 819 P.2d 886, 889 n.3 (Alaska 1991) (internal 

citations omitted). 

        48       McCarty v. McCarty, 453 U.S. 210, 218 (1981). 

        49       Mansell v. Mansell, 490 U.S. 581, 585-86 (1989). 


----------------------- Page 15-----------------------

waived to receive disability benefits.50       None of these scenarios is at issue in the Burts' 

case. The superior court did not order the division of Leon's health benefit, nor was Leon 

ordered   to   continue   providing   health   coverage   for   Ann.   Rather,   the   superior   court 

awarded the full value of this benefit to Leon without changing any of the eligibility or 

coverage requirements.   As Ann points out, "[t]he medical benefit remains in place and 

continues to be governed by its own rules unaltered by the state court." 

                Although neither Mansell, nor the Former Spouses' Protection Act, nor 

McCarty directly addresses the treatment of military health benefits in divorce, it appears 

that TRICARE benefits have more in common with military disposable retired pay - 

which courts may permissibly categorize as marital property under the Former Spouses' 
Protection Act51 - than disability pay, which state courts may not characterize as marital 

property.52   Any military retiree with the required years of service is eligible for both 

disposable retired pay53 and TRICARE benefits,54 but only service members who are 

disabled   are   eligible   for   military  disability   retired   pay   or   VA   disability   benefits.55 

        50      Young v. Lowery, 221 P.3d 1006, 1011 (Alaska 2009). 

        51      10 U.S.C.  1408(c) (2006); Mansell, 490 U.S. at 581. 

        52      10 U.S.C.  1408(a)(4)(B), (c) (2006);Mansell, 490 U.S. at 581. 

        53      10 U.S.C.  1406, 3911, 3914, 3917, 3918, 3929 (2006).                   Disposable 

retired pay is defined as "the total monthly retired pay to which a member is entitled" 
less certain exclusions.     10 U.S.C.  1408(a)(4) (2006). 

        54      See Sharon Foster, TRICARE Does Not Retire When You Do, TRICARE 

(June      16,    2011), 
("Automatic coverage by TRICARE Standard . . . occurs after retirement as long as 
DEERS information is current."). 

        55      MARK     E.   SULLIVAN ,      THE   MILITARY     DIVORCE      HANDBOOK           440-42 

(American Bar Association, 2006). 


----------------------- Page 16-----------------------

TRICARE         benefits    more    closely   resemble     those   pension     benefits   that  may     be 

characterized as marital property under federal law, rather than those that cannot.  Given 

the presumption against preemption in areas traditionally left to state regulation - such 
as family law56 - and given that the superior court did not divide, alter, or amend Leon's 

TRICARE benefit, the limitations on state court division of military retiree pensions do 

not lend significant support to Leon's position. 

                Leon also argues that the superior court's valuation "stands as an obstacle 

to   accomplishment"   of   TRICARE's   express   purpose:            to   "create   and   maintain   high 

morale in the uniformed services by providing an improved and uniform program of 

medical and dental care for members and certain former members of those services, and 
for their dependents."57      But the United States Supreme Court has held:               "State family 

and   family-property   law   must   do   'major   damage'   to   'clear   and   substantial'   federal 
interests before the Supremacy Clause will demand that state law be overridden."58                  Leon 

does not explain how valuing TRICARE as a marital asset does "major damage" to the 

federal interest of "creat[ing] and maintain[ing] high morale in the uniformed services," 

and there is no evidence in the record showing how valuation of TRICARE interferes 

with this federal interest. 

                In addition, Congress has made clear that there is an important federal 

interest in protecting former military spouses.             The legislative history of the Former 

Spouses' Protection Act explains that the "unique status of the military spouse and that 

        56      Egelhoff   v.   Egelhoff   ex   rel.   Breiner,   532   U.S.   141,   152   (2001)   (citing 

Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979)). 

        57       10 U.S.C.  1071 (2006). 

        58      Hisquierdo, 439 U.S. at 582 (quoting United States v. Yazell, 382 U.S. 341, 

352 (1966)). 


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spouse's great contribution to [the nation's] defense require that the status of the military 
spouse be acknowledged, supported and protected."59              Discussing the Former Spouses' 

Protection Act, Representative Charles Schumer stated: 

                [F]requent      military   moves    often   preclude    spouses    from 
                pursuing      their  own    careers    and   establishing    economic 
                independence.      As a result, military spouses are frequently 
                unable to vest in their own retirement plans or obtain health 
                insurance     coverage     from    a  private   employer.     Military 
                spouses     who    become     divorced    often   lose   all  access   to 
                retirement and health benefits - despite a "career" devoted to 
                the military.[60] 

Allowing the superior court to consider Leon's TRICARE benefit as a marital asset best 

effectuates the congressional goal of protecting former military spouses while staying 

within    the  eligibility  restraints   Congress    has   set   for  the  program.   Characterizing 

TRICARE in this manner does not conflict with a federal interest; to the contrary, it 

effectuates one.  We therefore hold that conflict preemption did not prevent the superior 

court from characterizing Leon's TRICARE benefit as a marital asset and awarding this 

benefit to Leon. 

        B.	     The Value Placed On Leon's TRICARE Benefit Was Not Supported 
                By The Record. 

                Leon argues that even if TRICARE can be marital property as a matter of 

law, the superior court's valuation of his TRICARE benefit was erroneous.                   Leon first 

claims   the   superior   court   should   not   have   valued   his   TRICARE   benefit   because   he 

intends to "drop" this coverage once his son is no longer eligible to be covered by it, so 

it has no value to him.     But Ann's expert, Sheila Miller, testified that a person does not 

        59      S. REP. NO. 97-502, at 6 (1983), reprinted in 1982 U.S.C.C.A.N. 1596, 


        60      128 CONG. REC. 18, 318 (1982). 


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"drop" TRICARE; Leon may choose to stop paying for TRICARE Prime, but he will still 

be covered by TRICARE Standard and, starting at age 65, TRICARE for Life.  The 

superior court recognized this, concluding:   "[T]he fact that [Leon] may [choose] to use 

VA Medical Benefits in the future, rather than Tri-Care does not diminish the value of 

the medical benefits available for him to use." 

                Miller also testified that Leon's VA benefit is worth the same as, if not 

more than, his TRICARE benefit.           Leon offered no evidence to counter this testimony. 

Therefore, even if Leon is correct that TRICARE was the wrong plan to value because 

he   intends   to   use   his   VA   health   care   benefit   rather   than   TRICARE,   Leon   was   not 

prejudiced by the superior court's decision to value his TRICARE benefit.                      Miller's 

decision to value TRICARE, and the superior court's acceptance of that decision, may 
have worked to Leon's benefit.61 

                Leon also claims the superior court erred by relying on Miller's TRICARE 

valuation because Miller based this valuation on Leon's projected life expectancy, which 
she calculated using a standard actuarial table.           Leon claims that Ethelbah v. Walker62 

requires the superior court to consider an individual's life expectancy and health status 

when   valuing   benefits.     Under   his   interpretation   of  Ethelbah,   Leon   argues   that   the 

        61      Leon claims a veteran must be disabled to receive VA health care, and 

therefore including his VA benefit as a marital asset would be inappropriate because the 
benefit "take[s] on the character of the disability pension," which a state court may not 
consider as marital property.   But Leon concedes that it was not necessary for him to be 
disabled to qualify for VA health care at the time he enrolled.  And even if Leon intends 
to exclusively use his VA health care benefit, his TRICARE will still be available to him. 

        62      225 P.3d 1082, 1090 (Alaska 2009). 


----------------------- Page 19-----------------------

superior court should have adjusted his projected   life expectancy to account for his 
personal health history.63 

                 In  Ethelbah,   we   affirmed   the   superior   court's   decision   to   rely   on   one 

valuation method over another, particularly because the chosen method accounted for the 
individual's actual health conditions.64  But we have never required that a lifetime benefit 

must be valued based on the actual life expectancy of the recipient.  Further, the option 

of valuing Leon's lifetime military health benefit based on his life expectancy as adjusted 

for his personal health history was not available to the superior court; Leon did not 

present   a   competing   valuation   that   incorporated   his   personal   medical   information. 

Instead, he sought to discredit Miller without presenting any alternative evidence of his 

own.    Consideration of Leon's individual health history likely would have made the 

superior court's valuation more precise, but we do not fault the superior court for failing 
to consider evidence that was not presented.65           On this record, we do not find error in the 

superior court's acceptance of Miller's valuation method. 

                 Leon also argues that the superior court erred by adopting the valuation of 

his   TRICARE   benefit   included   in   Miller's   expert   report,   rather   than   the   figure   she 

        63       Leon   also   asserts   that   Miller   erred   because   "her   calculations   had   Leon 

living to 115 years of age."  Miller's report did consider the value of Leon's TRICARE 
benefit if he lived to 110 years of age (not 115), but the computation worksheet used 
actuarial figures that gave Leon a .014% chance of surviving to 110. The corresponding 
value of the benefit was pegged at $0.63.               We find   no   error in   the   superior   court's 
adoption of Miller's actuarial table, probability-of-survival percentages, and expected- 
value calculations. 

        64      Ethelbah, 225 P.3d at 1090-91. 

        65      Id. at 1093-94 (" '[I]t is the duty of the parties, not the court, to ensure that 

all necessary evidence is before the court in divorce proceedings and . . . a party who 
fails to present sufficient evidence may not later challenge the adequacy of the evidence 
on appeal.' " (quoting Root v. Root, 851 P.2d 67, 69 (Alaska 1993)). 


----------------------- Page 20-----------------------

testified to at trial.  We agree.  Miller's written report concluded that the marital portion 

of Leon's TRICARE benefit had a present value of $125,959. But Miller testified at trial 

that "there may [have been] an error [in her] spreadsheets," which would have caused 

her to "overstate the value of the present value by 10%."  Miller testified that she would 

be more "comfortable" with a valuation of $113,363 as a result of this possible error. 

Given her testimony, and no other evidence to support the $125,959 valuation, it was 
error to use the valuation contained in Miller's written report.66        We remand for the 

superior court to reconsider the value of Leon's TRICARE benefit.67 

       C.      The Facts Of This Case Warrant An Unequal Distribution. 

               Leon also challenges the superior court's distribution of the marital estate 

as an abuse of discretion.   This argument is initially premised on what Leon considers 

to be the superior court's erroneous treatment of his TRICARE benefit as a marital 
asset.68 Because we do not agree that this characterization was erroneous, as we have 

explained, the first premise for Leon's challenge fails. 

               The superior court determined that it awarded approximately 62% of the 

marital estate to Ann and approximately 38% to Leon, but these percentages do not 

include the military and FERS pensions.        When the equal division of the pensions is 

       66      We also note that while the superior court valued this benefit at $125,959 

in its findings of fact and conclusions of law, the court's distribution spreadsheet listed 
the   amount   at  $129,959.    The   larger  figure  on  the  spreadsheet   appears   to  be  a 
typographical error. 

       67      The superior court should also clarify on remand whether Miller used the 

value of TRICARE Prime or TRICARE Standard in her calculations. 

       68      Leon claims the superior court's distribution resulted in Ann receiving over 

92% of the marital estate, but his calculation excludes the TRICARE benefit from the 
marital estate and it ignores that the superior court awarded him 50% of his FERS and 
military pensions. 


----------------------- Page 21-----------------------

factored in, Ann actually received approximately 57% of the marital estate and Leon 

received approximately 43% of the marital estate. 

                We will consider the superior court's distribution of the marital estate to be 

erroneous only where there was an abuse of discretion, which occurs when the superior 

court's decision is "arbitrary, capricious, manifestly unreasonable, or stems from an 
improper motive."69 

                Once a trial court has characterized and valued the parties' marital property, 
it must make an equitable allocation by considering the circumstances of the parties.70 

"It is generally presumed that a 50-50 property division is the most equitable starting 
point,"71 but an unequal allocation can be "condoned when it is justified by relevant 

factors identified in the findings of the court."72       The statutory factors considered when 

dividing marital assets include:         (1) length of marriage and station in life; (2) earning 

capacity; (3) conduct of each party during marriage including depletion of marital assets; 

(4) desirability of awarding the home to the party who has primary physical custody of 

children;   (5)   circumstances   and   necessities   of   each   party;   (6)   age   and   health   of   the 

        69      Morris v. Horn, 219 P.3d 198, 203-04 (Alaska 2009) (internal quotation 

marks and citations omitted). 

        70      Hansen v. Hansen, 119 P.3d 1005, 1009 (Alaska 2005) (citing Moffitt v. 

Moffitt, 749 P.2d 343, 346 (Alaska 1988)). 

        71      Jones v. Jones, 666 P.2d 1031, 1034 (Alaska 1983) (citing  Wanberg v. 

Wanberg, 664 P.2d 568, 574-75 (Alaska 1983)). 

        72      Hayes v. Hayes, 756 P.2d 298, 300 (Alaska 1988) (citing  Wanberg, 664 

P.2d at 574-75). 


----------------------- Page 22-----------------------

parties; and (7) financial circumstances of the parties, including the availability and costs 
of health insurance.73 

                The superior court considered and discussed each of these factors in its 

findings of fact and conclusions of law.          The superior court found that the parties were 

in approximately equal health, that their ages were comparable, and that the parties' 

assets were primarily acquired during the marriage.               The superior court awarded the 

family home to Ann.  This was consistent with her assuming responsibility for caring for 

the parties' adult son, who will continue to live with Ann unless or until he becomes 

capable of living independently. 

                The superior court also observed a significant disparity between Leon's 

earning capacity and Ann's earning capacity.             Leon was expected to continue earning 

over $62,000 per year from his civil service job alone.              He also receives a "significant 

employer   match   on   his   TSP   account   contributions   in   addition   to   a   defined   benefit 

retirement fully funded by his employer."   Ann, on the other hand, earns approximately 

$35,000 annually and does not have a defined retirement benefit, although she may 

contribute to a 401(k) that has a "lifetime cap of employer matching contributions . . . of 

$21,500   for   employees   over   age   50."     Ann's   current   job   does   not   provide   medical 

benefits and the superior court considered Ann's expert's testimony that there is little 

chance of her obtaining a job that does. 

                The factors the superior court cited readily support an unequal distribution 

of   the   marital   estate. Ann   is   responsible   for   caring   for   the   parties'   adult   son   while 

earning less income with fewer benefits than Leon.                We find no error in the superior 

court's conclusion that the facts of this case warrant an unequal division of the marital 

        73      AS 25.24.160(a)(4); see also Jones v. Jones, 942 P.2d 1133, 1137 (Alaska 

1997); Merrill v. Merrill, 368 P.2d 546, 547 n.4 (Alaska 1963). 


----------------------- Page 23-----------------------

estate. On remand, the superior court should consider whether   the   overall property 

division should be modified to accommodate for the adjusted value of Leon's military 

health care benefit. 


              We    AFFIRM     the  superior   court's  decision  to  characterize  Leon's 

TRICARE benefit as a marital asset.      We REMAND   for the superior court to value 

Leon's TRICARE benefit and for additional proceedings consistent with this opinion. 

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