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Why does it matter when assets are valued?

Divorce brings with it many complicated family law issues and property division is one of them. When a couple separates, their marital assets are divided amongst them depending on the property divisions laws of that state. In order to ensure that asset division takes place property, it is essential that those assets be valued. This seems like a straightforward process-the parties choose a date and the assets are valued as of that date. Unfortunately, it is not as straightforward at all and in fact can end up being quite complex.

Missouri residents may not be aware that the valuation date poses the biggest challenge in the valuation process. What does this mean? The valuation date is the point in time on which the asset will be given a specific dollar amount. The value of the asset can differ greatly based on the valuation date. It can be either the date of separation or the date of the trial and since there can be a long delay between these two dates, the value of the asset can vary greatly.

Courts generally make a distinction between active assets and passive assets. An active asset is one in which the value can change based on the actions of the owner-a marital home can be considered an active asset because the owner can make improvements to increase the value or diminish its value by allowing it to fall in disarray. The value of these assets is considered from the date of separation to prevent owners from controlling the value. A passive asset on the other hand is one in which the value changes due to forces outside the owner's control-stock portfolios can be considered passive because the market force controls their value. These assets are valued on the date of trial.

The date of valuation can have a huge impact on the valuation of the property and therefore, property division. Having someone who understands the valuation process, its implications and how to use the law to one's advantage can be a game changer during divorce proceedings.

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Joseph J. Porzenski
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