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Laughlin v. Laughlin

Supreme Court of Alaska

April 30, 2010

Karen LAUGHLIN, Appellant,
v.
Brian LAUGHLIN, Appellee.

Page 1003

Robert C. Erwin, Robert C. Erwin, LLC, Anchorage, for Appellant.

Appellee not participating.

Before: CARPENETI, Chief Justice, FABE, WINFREE, and CHRISTEN, Justices.

OPINION

CHRISTEN, Justice.

I. INTRODUCTION

Karen and Brian Laughlin divorced in October 2008. Before trial, the parties agreed to establish a " children's fund" from which they would pay certain children's expenses in lieu of child support. The superior court conducted a bench trial on the issues the parties were unable to resolve and incorporated the children's fund agreement into its final order. Karen appeals restrictions the court placed on the use of the children's fund. She also appeals the superior court's allocation of dependent tax credits and its determination of the reasonable rental value of the parties' marital residence. We reverse the superior court's decision to approve the creation of the children's fund in lieu of child support and remand for calculation of child support consistent with Alaska Rule of Civil Procedure 90.3. Because the agreement to establish a children's fund was the basis for the superior court's decision to allocate a dependent tax deduction to Brian, we also vacate that decision. We affirm the superior court's determination of the reasonable rental value of the parties' marital residence.

II. FACTS AND PROCEEDINGS

Karen and Brian Laughlin were married in Palmer, Alaska in 1982 and have four children. Brian filed a complaint for divorce in 2005.

Karen and Brian reached settlement on most issues prior to trial, including child custody, child support, and a majority of the disputes over property distribution. Superior Court Judge Vanessa White read the parties' partial settlement agreements into the record on April 23, 2007 and June 8, 2007. In lieu of monthly child support payments, the parties agreed to set up a bank account (the " children's fund" ) to pay some of the children's expenses. The children's fund was set up to cover specified expenses only, including uncovered medical expenses, school activity fees, and the parties' life insurance premiums. To establish the fund, the parties agreed that Karen would contribute approximately $19,000 from her Morgan Stanley account and that they would jointly contribute approximately $12,000 from a joint Scudder money market account. The parties also agreed that Brian would not make ongoing child support payments to Karen, and that Karen's $12,000 child support arrearage

Page 1004

would be forgiven. In addition to the expenses covered by the children's fund, both parents agreed to be responsible for the children's discretionary expenses incurred during the time each had physical custody. Karen had physical custody 70% of the time; Brian had physical custody 30% of the time.

The superior court addressed the remaining disputes over custody, property, and tax considerations at trial, and issued findings of fact and conclusions of law on May 29, 2008. The court incorporated the parties' partial settlement agreements into its final order. Both parties moved for reconsideration and the court issued an order on September 24, 2008 adopting some of the suggestions from both parties.[1] A divorce decree was entered on September 11, 2008, although its effective date was December 11, 2007.

On appeal, Karen argues that the superior court erred by: (1) restricting the use of the children's fund; (2) not considering appropriate tax implications resulting from the transfer of assets to the children's fund and the division of shares that were marital property; (3) granting a dependent tax deduction to Brian, who had custody only 30% of the time; and (4) setting the rental ...


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