As a pool of marital assets increases in size and complexity, the risk of property division conflict during a divorce increases as well. Spouses with large marital estates containing a variety of resources may find it relatively challenging to amicably resolve property division matters.
When the marital estate includes assets that could fluctuate in value, such as business holdings, real estate and stocks, spouses may need to set a valuation date. That date can actually play a major role in the outcome of property division proceedings.
Why does the valuation date matter?
The process of determining the fair market value for marital resources often involves an assessment of the overall economy or the demand for those resources. Therefore, the chosen valuation date for marriage property can profoundly influence the estimated fair market value of key resources. The performance of the stock market, the level of demand for local real estate and various other details about the chosen valuation date may have a significant impact on the final values established for major assets.
In cases where spouses find themselves disagreeing about the value of marital resources, setting an agreed-upon valuation date can help resolve those disputes. If spouses or the professionals they hire use economic data from the same day, the fair market values they establish are likely to be close to one another instead of vastly different.
Selecting an appropriate valuation date can be as important as carefully assessing inventories of assets for omissions and undervalued resources. People preparing for high-asset divorces may need assistance protecting their financial interests and ensuring a fair outcome, and that’s okay.