One of the thorniest problems wealthy couples face when they decide to end their marriage is valuing the assets that they jointly own. Assets acquired by a spouse prior to marriage remain the property of that spouse during the marriage, as do assets such as bequests and gifts, and these assets are not affected by the divorce, unless they are comingled with marital property Couples who have been married for a more than a few years may have seen the value of their jointly owned assets increase significantly. Valuing and dividing these assets may therefore be the most difficult issue when high-asset couples decide to divorce.
The most important question is the date on which the assets must be valued. The valuation date can have a significant impact on calculating the amount of property to which each spouse is entitled. Florida statutory law provides three options: the date on which the divorce petition was filed, the date on which the parties enter into a valid marriage dissolution agreement, or any valuation date established by such an agreement. The statute does not, however, choose one date over another. That choice resides with the trial judge.
Marital property must be divided equitably, and trial judges strive to choose a valuation date that is fair to both parties. Given the generality of the statute, courts choose from three dates: the date on which the parties separated, the date on which the divorce petition was filed, or the first day of trial. If a significant amount of time has passed between one of the statutorily prescribed dates and the beginning of the trial, the value of the assets may have changed dramatically. In such cases, the courts generally use the first day of trial as the valuation date to achieve an equitable division of assets.
In choosing a valuation date, Florida courts examine most closely the reason for the change in value of marital assets. If an increase or decrease is caused by the efforts or malfeasance of one party, the court will chose an earlier date to pass on the change in value to the spouse whose efforts are primarily responsible for the change. If changes are caused by market forces or similar reasons, courts will choose the later valuation date – usually, the first day of trial – to ensure that both parties share the change equally.
Source: Florida Bar Journal, “Choosing a Valuation Date of Marital Assets in Dissolution of Marriage Cases: Perlmutter and its Permutations,” May 2007, David L. Manz