Divorce, Valuation Dates, and Finances

May 7, 2009

Divorce, Valuation Dates, and Finances

Question:  

Consider for a moment that you and your spouse decided to divorce in May of 2007, separated your households and began living apart, but you did not file for divorce until May of 2009.  You know that your house is worth less than it was worth two years ago.  You may even be under water on the house now, whereas two years ago, you may have had $20,000 or $30,000 worth of equity in your home.  What date is used to value the house in a divorce?

 Answer: 

Under Minnesota law, the valuation date is presumed to be the date of the first regularly scheduled pretrial hearing.  However, parties to a divorce can agree to use a different valuation date.  More importantly, a different valuation date can be used by the Court if it finds that the alternative valuation date is more fair and equitable under the circumstances.   This used to be an issue that was rarely litigated, but with the global economic crisis affecting the value of houses and retirement assets so dramatically, it is now a topic of divorce litigation in almost all of my cases here in Minnesota. 

 Workarounds: 

There are ways around the issue.  For example, with retirement and investment assets, parties can agree to simply split the asset equally without placing a value on the asset.  Or, parties can trade similar assets that have been affected equally by the economy without placing a value on either asset.   What you can work out depends of course on how much cooperation you can get from the opposing party.

 Jennifer Moore
Moore Family Law, P.A.
www.MooreFamilyLawMN.com 

jennifer.moore@moorefamilylawMN.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s