Alaska Supreme Court extends divorce-law tracing rule to unmarried partners' property

The Alaska Supreme Court ruled Friday that unmarried domestic partners keep property bought with one partner's own money and titled in that partner's name alone. It reversed a Dillingham court's finding that a fishing charter boat and a building belonged to both partners.

Under the ruling, an item bought during a partnership with one partner's separate funds, and titled only to that partner, stays separate "regardless of what the Bishop factors show." Courts have used those factors, such as joint bank accounts, shared household costs and joint businesses, to judge whether partners meant to share property.

Scott King and Courtenay Carty were together from October 2015 until July 2023 and had a daughter. They ran a vacation rental, Lake Road Lodge, and a fishing guide business, West Side Charters. In 2019 King bought a boat, the CAROLE MAE, for $25,000, paying for it from his personal account. It was titled only to him and used for the charter business and family outings.

Superior Court Judge Stephen B. Wallace in Dillingham ruled in August 2024 that the boat and King's Highbush Drive building were partnership property and ordered King to pay Carty $100,688 to even out a 50-50 split.

Justice Borghesan's opinion borrows the tracing doctrine from divorce law, which classifies an asset by the money used to buy it rather than by the partners' intent. The court had called that approach "logical" for partners in Armstrong v. Woods, an unpublished 2019 decision.

The court cited Carty's testimony that they chose not to marry because "if [they] didn't marry on paper, [they] wouldn't have to divorce in court," and "if [they] maintained separate assets, [they] wouldn't have to divide them if [they] were ever to separate."

"Even in marriage, with its formal commitment to union and default rule that property is shared, the law gives significant protection to people's separate property," Borghesan wrote.

The court also reversed on the Highbush building. King bought the land in 2008, seven years before the partnership began, and finished the building in 2011. Property owned before a partnership is not partnership property, even when a shared business uses it, the court said.

The case returns to the Dillingham court. The Supreme Court left open whether separate property can become shared through an implied gift. Carty did not make that argument.