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Protecting What Matters Most

Timing matters – why valuation dates are important

On Behalf of | Aug 21, 2017 | Blog

During a marriage that stretches over many years, it is easy to collect a significant amount of marital property. You may have your main residence in Rhode Island and vacation property in another part of the country. You most likely have one or more retirement accounts, an investment portfolio, and even a business you and your future ex-husband will have to divvy up.

Unfortunately, it is never as easy as splitting things down the middle during divorce proceedings. Dividing marital assets can be an extremely complicated process that can leave you very frustrated. The key is to stay focused and not let the complexity overwhelm you. Part of this is hiring the right people to the job. From your attorney to your accountant and financial advisor, it is best to let these people handle the nitty-gritty. For example, when it comes time to start assigning values to assets, it is important to have an actuary that can handle the challenge. This is because there are many aspects to property valuation that need to be addressed to ensure you get your fair share in the divorce settlement. Read further to find out more about why valuation dates are important and how they can affect your divorce settlement.

Know your separation date

Make a note of your date of separation. This date is extremely important. This is the date when you and your husband ceased to function as a couple. Furthermore, the date of separation may play a role in determining what is marital property and what is separate property. In addition, it may also help determine a valuation date for the marital property.

Date of separation vs trial date

In many cases, the assets acquired during marriage may be subject to more than one valuation date. For example, the court typically uses the date of separation for active assets and the trial date for passive assets. Active assets typically include items such as businesses interests or even your main residence. In other words, any property that you or your husband can directly affect the value of is an active asset. Passive assets are those that change due to outside forces such as the market.

Why timing matters

The valuation date of an asset can have a huge impact on its value. For example, if you and your spouse have invested in a stock portfolio, it can be subject to short-term market changes. If it is valued on the date of separation, that value may be drastically different from its value on the trial date due to the possibility of stock prices rising or falling.

Before you start negotiating over marital property, be sure all the assets have been assigned the appropriate values based on state valuation laws. Furthermore, do not rely on the valuation of only one professional, even if that individual was court appointed. When it comes to high-asset divorces, second opinions are important in order to ensure you are getting the settlement you deserve. Your attorney will be able to help you through the process so that you can walk away with everything you need to start over.

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