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Valuation dates may affect your property division

One of the most complicated aspects of divorce is the process of property division. Determining who owns what and how to fairly and equitably divide money and assets can be a long and exhausting process. This is especially true in a volatile economy such as the one we are currently in. The value of assets can change significantly from month-to-month or even week-to-week, which is why the concept of a valuation date is so important.

A valuation date is the point in time at which an asset is assigned a dollar value. For example, if your ex-spouse will be keeping the family home and reimbursing you for half of its value, the court will designate its valuation date. The value the house holds on that specific date will determine how much your spouse owes you, regardless of whether the home goes up or down in value after that date.

Generally, there are two different types of assets: active and passive. An asset will be labeled active if the actions of the owner can change the asset’s value. For example, a business or the home can be considered active because the owner’s actions can raise or lower its value. In contrast, an asset will be labeled passive if its value is out of the direct control of the owner, such as a stock portfolio with a value that is dependent on market forces.

The valuation date can vary based on several factors. Common valuation dates are the date of the initial divorce filing, the trial date, or the date of separation. However, state laws vary significantly, so check with your Atlanta divorce attorney to determine whether Georgia family laws will dictate your valuation date.

Source: Forbes, “How the Valuation Dates of Different Assets Are Decided During Divorce,” Jeff Landers, Oct. 12, 2011