Agreeing to Valuation Dates
February 18, 2009
You and your spouse have been through counseling and some tough times, and you’ve come to realize that it’s time to separate, or even, divorce. During this emotionally taxing time, you also have to start thinking about dividing your physical property.
The property you have to consider dividing includes just about everything, including the kitchen sink. It includes your home, cabin, cars, possibly a boat and a pair of jet skiis. The property represents a lot of investment of time and money in physical objects. Further, there are intangible assets that are literally investments, including bank accounts, retirement assets, and investment assets.
Before the recent downturn in the economy, it was relatively simple to determine the value of individual property. Your home could be appraised, and you could refinance the mortgage fairly easily to buy out one spouse. You could look up the Kelley Blue Book value of vehicles. You could talk to your Human Resources director to get a current valuation of your 401(k).
That’s not necessarily the case any more. It has gotten more difficult to value property that has significantly lost value over recent time. Setting the valuation date becomes an issue to be fought over, as each of you want a more beneficial valuation date to maximize your share of the property.
Minnesota statute sets the valuation date of property to be divided in the divorce “as of the day of the initially scheduled prehearing settlement conference.” Minn. Stat. § 518.58, subd. 1. It is possible, however, to modify that valuation date if “agreed upon by the parties.” Id. Further, the court may make “specific findings that another date of valuation is fair and equitable.” Id.
Ideally, you and your spouse should agree on a date to determine the values of all your property. This may include talking to a real estate agent to discuss the value of your home, an accountant to determine the value of your physical assets, and a financial advisor to determine the best time to value your intangible assets. The more you and your spouse can cooperate on this one issue as you move through the divorce process, the more you can save in attorneys’ fees down the road.