Property division is a necessary component of most divorces. Unless spouses already have a legal agreement in place regarding the distribution of their assets and responsibility for their debts, they have to make those decisions during the divorce process.
The more resources that spouses share with one another, the more difficult it can be to reach a mutually agreeable, reasonable property division settlement. Spouses may disagree about who keeps what and even the financial value to attach to specific resources. Selecting a valuation date can help spouses work toward an amicable outcome.
What is a valuation date?
A valuation date is essentially a specific day selected for the purposes of determining the fair market value of different assets. Resources ranging from stocks and businesses to real property fluctuate in value from one day to the next.
When calculating the fair market value of resources, it is often necessary to factor in economic considerations. If spouses attempt to calculate asset values using different dates, they may struggle to reach an agreement.
However, if they both use economic data from the same date, the valuations they establish are less likely to be significantly different from one another’s. The closer their estimates regarding asset valuation are, the easier it becomes to agree on how to distribute marital property.
In scenarios where valuations can play a major role in the final property division settlement, selecting the date for the valuation of those resources is an important step. Spouses preparing for high-asset divorces may need help understanding their rights and preparing for negotiations, and that’s okay.
