[¶ 1] Abe L. Fox appealed from a judgment granting him and Shirley J. Fox a divorce, claiming the trial court erred in valuing and dividing their marital property. Shirley Fox cross-appealed from the judgment, claiming the trial court erred in failing to award her cash spousal support. We conclude the trial court erroneously valued the parties’ marital estate. We reverse and remand for the trial court to revalue the marital property, and to reconsider the distribution and Shirley Fox’s request for cash spousal support.
I
[¶ 2] Abe Fox and Shirley Fox were married in 1965 and have two adult children. Abe Fox was a physician who worked as a pathologist during most of the marriage. In 1994 he became disabled. Abe Fox, who was 60 at the time of trial, receives disability payments of $17,200 per month until he turns 65. Shirley Fox, who was 59 at the time of trial, completed two-and-one-half years of college during the marriage but did not earn a degree. She has not worked outside of the home since 1966. According to Shirley Fox, Abe Fox recently became aggressive and angry, and began irrationally handling financial matters. In 1997, after 32 years of marriage, she brought this divorce action.
[¶ 3] The trial court valued the parties’ marital property at almost $4 million, awarding Shirley Fox $1,823,747 in property and Abe Fox $2,032,093 in property. The court treated Abe Fox’s future disability payments as marital property and valued them at $1,032,000, representing the total payments he will have received from January 1998 until he turns 65. He was awarded the disability payments as part of his property distribution. The court valued the parties’ home at $295,000 and awarded it to Shirley Fox. In the event she sells the home, the court awarded him 50 percent of the equity from the sale. He was also ordered to “pay the mortgage payments, real estate taxes, special assessments, insurance on the house, utilities, and any necessary home repairs and maintenance.”
[¶ 4] The trial court did not include in the parties’ marital property, or assign a value to, a self-sustaining irrevocable life insurance trust created by Abe Fox, under which Shirley Fox serves as trustee for the benefit of the family. The court refused to place a value on the trust and include it in the marital estate, reasoning there was no “competent evidence on which I can base a value for the trust in terms of a distribution of property that will be meaningful or fair to both sides.” The court also denied Shirley Fox’s request for a cash award of spousal support. The court reasoned, given the property distribution, the “evidence does not support requiring Abe to pay spousal support to Shirley in order for her to maintain her standard of living or to support herself.”
[¶ 5] The district court had jurisdiction under N.D. Const, art. VI, § 8, and N.D.C.C. § 27-05-06. The parties’ appeals are timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const, art. VI, § 6, and N.D.C.C. § 28-27-01.
II
[¶ 6] Upon granting a divorce, the trial court is required by N.D.C.C. § 14-05-24 to make an equitable distribution of the marital estate.
Gibbon v. Gibbon,
[¶ 7] A property distribution need not be equal to be equitable, but a substantial disparity must be explained.
Fisher v. Fisher,
A
[¶ 8] Abe Fox argues the trial court erred in including his future disability payments as part of the couple’s marital property. He claims when the erroneously-included $1,032,000 is subtracted from his part of the property distribution, there is a substantial disparity in the property division, which the trial court failed to explain. Shirley Fox agrees the trial court erroneously labeled the disability payments as property, but contends removing them from the property distribution nevertheless results in an equitable division that was adequately explained by the trial court.
[¶ 9] The trial court’s inclusion of Abe Fox’s $1,032,000 in future disability payments as marital property subject to distribution is clearly erroneous because it was induced by an erroneous view of the law. Although pensions and retirement benefits are marital assets subject to equitable distribution by the court,
see Nelson,
[¶ 10] Shirley Fox claims this error is harmless because the
Rujf-Fischer
guidelines combine concepts of marital property and income and are to be used both in making an equitable distribution of property and in awarding spousal support.
See, e.g., Lohstreter v. Lohstreter,
[¶ 11] The trial court’s error was substantial, adding more than $1 million to Abe Fox’s side of the property distribution ledger; and, as we explain later, the trial court made other errors in valuing and distributing the parties’ marital property. Under these circumstances, we are unconvinced the trial court would have made the same division of property even if it had not considered the future disability payments as part of the marital estate.
B
[¶ 12] Abe Fox argues the trial court erred in failing to assign a value to an irrevocable life insurance trust he established as part of the couple’s estate plan. Shirley Fox is trustee, and the trust corpus consists of life insurance policies on Abe Fox’s life with death benefits totaling $814,969 and a cash *546 value totaling $290,000 at the time of trial. Because the trust corpus consists of life insurance policies, the trust is not expected to initially generate any income. Nevertheless, Shirley Fox is given the right to receive all net income in regular installments from the trust during her lifetime. She also has the right during her lifetime to withdraw the principal in an amount not to exceed the greater of $5,000 or 5 percent of the value of the principal determined at the end of each calendar year. Although she has the right to cash in the life insurance policies and invest the $290,000 to generate income, she testified she had no plans to do so. Consequently, the trust is not currently generating any income, and unless she changes her mind, the trust will not generate any income until Abe Fox dies.
[¶ 13] Abe Fox argued to the trial court the trust should be valued at its present cash value of $290,000. Shirley Fox argued no value should be assigned to the trust or, in the alternative, the trust should be assigned a value representing the present value of her right to withdrawal upon Abe Fox’s death. Her certified public accountant testified the present value of that right was $50,000. The trial court placed no value on the trust, reasoning:
It is undisputed that the cash value of the insurance policies that are the corpus of the trust totals $290,000 and that the death benefit of the policies is $814,969. Shirley can never get either of these amounts though. Even if she were to cause the insurance policies to be cashed in, she would only be entitled to the income of the investments made with the cash, plus a withdrawal of 5% or $5,000 per year. Upon Abe’s death, Shirley is not entitled to the entire death benefit, but only the income and $5,000 or 5% of the princip[al] of the trust each year. Income from the trust in either instance is speculative at best, first because Shirley may or may not cash out the insurance policies and because there is no guaranteed return on investments. Even the valuation given the asset by [her certified public accountant] ($50,-000) is based on an assumed life expectancy and an assumed rate of return. I do not have competent evidence on which I can base a value for the trust in terms of a distribution of property that will be meaningful or fair to both sides. This is not due to lack of effort by counsel; there just is simply no way to give the trust a value that will not prejudice one side or the other due to the nature of the trust.
[¶ 14] Generally, trusts are includa-ble as marital property subject to equitable distribution by the trial court.
See Herrick v. Herrick,
[¶ 15] In this case, we conclude the tidal court’s failure to place any value on Shirley Fox’s interest in the trust is not supported by the evidence in the record and is clearly erroneous. We recognize there are various contingencies involved in her actually receiving income from the trust, but some of those contingencies are within her control. Although dividing the ultimate payments is not an option available here as it was in
Zuger
and
van Oosting,
her own witness, a certified public accountant, was able to place a $50,000 present value on her interest in the trust. The trial court’s apparent pessimism over the accountant’s use of “an assumed life expectancy and an assumed rate of return” in arriving at his calculation is puzzling because those “assumed” factors are often used in
*547
calculating present value.
See, e.g., Welder v. Welder,
C
[¶ 16] The trial court awarded the parties’ home, valued at $295,000, to Shirley Fox and awarded Abe Fox one-half of the equity if she decides to sell it. In the interim, the court ordered him to “pay the mortgage payments, real estate taxes, special assessments, insurance on the house, utilities, and any necessary home repairs and maintenance.” He argues the court’s requirement he pay all expenses on the house and receive one-half the proceeds of the sale is clearly erroneous because it establishes a continuing partnership between him and Shirley Fox, from which he is unable to extricate himself. She argues the home expense payments are actually “de facto spousal support,” but also objects to this condition because she believes it will cause continuing disputes and litigation between the parties.
[¶ 17] In distributing marital property, a court should try to disentangle the parties’ financial affairs to reduce further conflict, litigation, and rancor between them.
See Fisher,
[¶ 18] Because of the errors in the valuation and extent of the parties’ marital property, we reverse and remand for the trial court to revalue the disputed marital property and reconsider its distribution.
Ill
[¶ 19] In her cross-appeal, Shirley Fox argues the trial court erred in failing to award her cash spousal support. The court denied her request for spousal support, reasoning because of the property division the “evidence does not support requiring Abe to pay spousal support to Shirley in order for her to maintain her standard of living or to support herself.”
[¶ 20] In determining the spousal support issue, it is appropriate for the trial court to consider the standard of living of the parties in a long-term marriage and the need to balance the burden created by the separation when it is impossible to maintain two households at the pre-divorce standard of living.
Donarski v. Donarski,
[¶ 21] We prefer rehabilitative over permanent spousal support.
Neppel v. Neppel,
[¶ 22] Questions of property division and spousal support cannot be considered separately or in a vacuum, but must be examined and dealt with together, especially when there is a large difference in earning power between the spouses.
Schmaltz v. Schmaltz,
[¶ 23] Shirley Pox presented a compelling case for spousal support. The parties were married for 32 years. She was a homemaker during the marriage and stayed home with the couple’s children. She has not worked outside of the home since 1966. Although she attended college for some time during the marriage, she did not earn a degree. She testified if she re-entered the job market she might be able to find work as a phlebotomist, or she could “sell clothes” or “do some kind of a service job.” However, at 59, and having not been employed outside of the home since 1966, her entry into the job market may be difficult.
See Heley,
[¶ 24] The trial court apparently found no need to award Shirley Fox spousal support, because she was adequately provided for by her share of the property distribution. We have often said, however, a disadvantaged spouse is not required to deplete her property distribution in order to live.
See, e.g., Bakes v. Bakes,
IV
[¶ 25] We reverse the divorce judgment and remand to the trial court to revalue the marital property, and to reconsider the property distribution and Shirley Pox’s request for cash spousal support.