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Did you choose the most advantageous value date for your assets?

Some divorces are relatively simple matters to initiate and conclude. When there are no children and relatively few valuable assets, there usually isn't much to dicker over between the splitting spouses.

But in divorces with significant assets, it's a whole other ball game. Each asset must be assigned a specific value, and the day on which the dollar value is assigned is its valuation date. This can be a very important later on.

Sometimes the date a couple separated is used as a valuation date. Usually this will be the date used for active assets like a business or the family home, as their valuation can hinge on an owner's actions. For instance, a vengeful spouse could let a business close or house fall into disrepair.

But passive assets don't typically get a value assigned until the date of the trial. This is because their values depend upon external forces outside of either spouses' control, such as market fluctuations.

Therefore, if one spouse wants to keep a vacation property and the other desires the stock portfolio, if the country enters another recession, this could be a shaky trade-off. Conversely, electing to keep a collection of a living artist's works might pay off handsomely if the artist suddenly dies and their value goes through the roof.

The more complicated a divorce is, the longer it can take to move through the process from separation to divorce. It is imperative that the parties assign the most lucrative date for the assets they value so that they are able to reap the greatest payoff in the property settlement.

If you are unsure which date to use for some assets, address this issue with your New York divorce attorney well before any settlement negotiations begin.

Source: Forbes, "How the Valuation Dates of Different Assets Are Decided During Divorce," Jeff Landers, accessed March 16, 2016

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