Dividing property during a divorce is often so complicated that disputes around it can turn am amicable divorce into a acrimonious one. Decisions such as ‘who gets to keep the house’ and ‘who gets the stock portfolio’ are important ones that can lead to hours of wrangling in a conference room, but many New York residents may not even be aware of a further complicating factor in property division-the date on which the assets will be valued.
In order to ensure assets are divided as per property division laws in the state, it is important to know to make sure they are valued accurately. For this to take place, a valuation date must be chosen-the point in time at which the asset is going to be assigned a dollar value. Seems straightforward enough-the couple picks a date and assesses an asset’s value on that date. However, as with even the least complicated aspect of a divorce, even this can become a bone of contention between a divorcing couple.
Depending on the date of valuation, the asset’s value can fluctuate widely. This is because there can be a long delay between the date a couple decides to separate and the date their divorce is finalized. The date of separation is the day that the married couple no longer remains a functioning couple and is separated. Generally, active assets, such as the marital home, the business and the professional practice, are valued as of the date of separation. This is to prevent the party that owns it to allow it to go into ruin and lose financial value. Passive assets, on the other hand, such as vacant land and stock portfolios, change value independently of the owner and can be valued as of the date of the divorce.
In New York, the court chooses a date of valuation as soon as it is possible after the divorce proceedings have begun. The importance of the date of valuation cannot be stressed enough, as well as deciding what the date of one’s separation is, for legal purposes. These dates can help protect the interests of a spouse who might get the house but suffer because it is allowed to diminish in value. An experienced attorney can explain the importance of these dates and other family law issues to someone going through a divorce in New York.