The Alaska Supreme Court recently issued a ruling in the case of King v. Carty, which addresses the ownership of property following the end of a domestic partnership. The court's decision impacts how assets are divided when couples who are not married separate, particularly regarding property acquired before the partnership began. This ruling is significant for individuals in domestic partnerships, as it clarifies the legal standards for property classification and division.
In this case, Scott King and Courtenay Carty were in a romantic relationship for nearly eight years, during which they shared a daughter and operated two businesses together. After their separation in July 2023, King filed a lawsuit seeking a division of their domestic partnership assets. The couple agreed that they had been in a domestic partnership but disagreed on whether certain items of property were partnership assets that should be divided. The lower court ruled that all disputed property belonged to the partnership, but King appealed this decision.
The Alaska Supreme Court, led by Justice Borghesan and joined by Justices Henderson, Pate, and Oravec, reviewed the case. The court found that the lower court had erred in classifying two significant items—the Highbush property, which King owned before the partnership, and a boat purchased during the partnership but titled solely in King's name—as partnership property. The court clarified that only property acquired during the domestic partnership is subject to division as partnership property.
The court's ruling emphasized that the special property rules for domestic partnerships do not apply to assets acquired before the partnership began. The Highbush property was purchased by King in 2008, well before the couple's relationship started in 2015. The court stated, "Because the Highbush property was not acquired during the parties’ domestic partnership, it was error to classify it as partnership property."
Similarly, regarding the boat, named the Carole Mae, the court ruled that it was King's separate property. Although the boat was used for their joint charter business and family outings, it was purchased with funds from King's personal account and titled only in his name. The court noted, "Because the Carole Mae was purchased entirely with King's separate funds and titled in his name only, we reverse the court's ruling that the vessel was partnership property."
This ruling provides clarity on the legal framework surrounding domestic partnerships in Alaska, particularly regarding property rights. It establishes that the tracing doctrine, which determines the source of assets, applies to domestic partnerships, similar to married couples. This means that property acquired before or after a partnership cannot automatically be classified as partnership property.
The implications of this decision extend to future cases involving domestic partnerships in Alaska. It reinforces the importance of understanding how property is classified and the need for individuals in such relationships to be aware of their rights regarding asset ownership. The court's decision may encourage couples in domestic partnerships to formalize their agreements regarding property ownership to avoid disputes in the future.
As for what comes next, it remains to be seen whether either party will seek further legal recourse. The court's ruling allows for the case to be remanded for further proceedings consistent with its opinion, but details about any potential appeals or related cases were not available in the court filing.
In conclusion, the Alaska Supreme Court's decision in King v. Carty clarifies the rules governing property ownership in domestic partnerships, ensuring that individuals are aware of their rights and responsibilities as they navigate the complexities of asset division upon separation.