Is There a Legal Precedent for Valuing Assets at Current Market Values Versus the Date of a Divorce Filing?

In a divorce proceeding, marital assets are divvied up between the two parties through what’s called equitable distribution. The judge overseeing your divorce will essentially aim to split marital property and assets between you and your spouse as fairly and equally as possible. Though this process seems straight forward, divorce rarely is.

Each divorce is unique, which can make the valuation of marital assets a bit challenging. Generally speaking, the law allows for three dates for valuation: the date of separation, the date the petition to dissolve the marriage is filed, and the trial date (or the date of final hearing). After marital assets and liabilities are identified, the judge reviewing your case has the discretion to decide which of the three dates constitutes an appropriate date for valuation according to what is “just and equitable” under the circumstances presented by your particular case. Because the statute defines the issue of valuation dates so broadly, the court often relies on past case law and retains a great deal of discretion when choosing the date for valuation of marital assets.

Ultimately, to determine the date of valuation, the court will principally look at the cause of increase (or decrease) in valuation of each asset between the date of separation and the date of trial. If the change in valuation of an asset is a result of passive forces such as market conditions, the judge will likely choose the trial date as the date of valuation and split the asset equally. If the change in an asset’s value is a direct result of actions taken by you or by your spouse, the court will likely use the earlier date of separation or filing of the petition to direct that change in value at the party responsible.

Depending on your case, determining the valuation date of marital assets can be complex. In a divorce proceeding, it falls to you to show the court why a certain asset should be valued on a certain date. It is in your best interest to consult with a skilled divorce attorney that can help you navigate through your equitable distribution and help you protect your assets.

This post was written by David Hurvitz. Follow David on Google+.