When dividing up valuable assets during a divorce, couples must make sure that they get the correct valuations for all of their marital property. Some, such as real estate, is fairly simple to assess value. Other significant assets can be more complex. Often, timing is key to achieving the optimum value for negotiation purposes.
The valuation date is the specific time when each asset is assigned a monetary value. This date can matter a great deal when in the midst of a divorce. For instance, consider how the stock market crash only a few years ago affected the value of stocks, money market accounts and other investments. A valuation date during that time could spell disaster.
Virginia and valuation dates for marital assets
Virginia uses the nearest date as is “possible to the date of [the] evidentiary hearing.” When no hearing date is set, the date of the evaluation is used. It is very important to make the dates most advantageous to your position in the divorce. Your family law attorney can help you determine when this will be.
The law also takes into account another significant date in your divorce – the date of separation. Courts look to this date because it identifies when the two stopped functioning as a single marital unit and began acting – financially and otherwise – as two individuals with diverse interests. Certain acquisitions and earnings after the separation date may be viewed by the court as separate property not subject to division during the property settlement phase of your divorce.
Active versus passive assets
Most active assets are assigned value when the couple splits up, but passive assets often don’t get valued until they go to trial. Active assets are marital property that can fluctuate in value depending on the owners’ actions. Some examples include businesses, the marital home and any professional practices that are involved, like a doctor’s or dentist’s office. Because one spouse could take negative actions that allow an asset’s value to decrease during a divorce, attorneys often move to set its value at separation.
Passive assets value also can change. However, the forces that affect the value of these types of assets are out of the control of either divorcing spouse. Therefore, it is more important to consider market fluctuations like gluts and bubbles when attempting to valuate them.
By working closely together with your attorney and other members of your divorce team, you can walk away from your divorce in the best position to begin the next phase of your life.