Is the Separation Date or Divorce Date Used for the Value of a House?

By Wayne Thomas

The marital home can be the most prized and contested item in a divorce. It is also an asset that can change value dramatically from the time the couple separates to the date of the divorce trial. Courts generally have discretion to use the date of separation or trial date to properly account for increases or decreases in the value of your home.

The marital home can be the most prized and contested item in a divorce. It is also an asset that can change value dramatically from the time the couple separates to the date of the divorce trial. Courts generally have discretion to use the date of separation or trial date to properly account for increases or decreases in the value of your home.

Property Division Overview

When a couple cannot agree on who should get the marital home in a divorce, the court will decide based on state law. States generally give courts the authority to divide most assets accumulated during the marriage up to the date of separation. Assets acquired before the marriage and after separation are generally not divided and remain owned by the spouse that acquired them. Once the marital assets have been gathered, the court must place a monetary value on each item and allocate them between spouses in a fair or even manner, depending on the state.

Divorce is never easy, but we can help. Learn More

Valuing Real Property

Establishing the value of real property is typically accomplished by submitting appraisals and through expert witness testimony at the divorce trial. The date the court uses to value the property is referred to as the "valuation date" and some states, including New York, give the court the discretion to use any date between the date of filing for divorce through the date of trial. Other states are more specific and use either the date of separation, date of divorce filing, or date of trial. However, these rules often contain a provision allowing the court to use a different date at the judge's discretion or for "good cause."

Passive Assets

Good cause often exists to deviate from the standard valuation date when the nature of the asset is such that it can fluctuate in value considerably from the date of separation through the end of trial. This fluctuation often occurs with real estate, and judges are faced with the issue of determining how to apportion any gains or losses accumulated during that time. If the increase or decrease in value was due to market forces alone -- such as with an untouched vacant lot -- the date of trial is usually used. This is because if the date of separation or date of filing were used, the spouse awarded the property would be unfairly given a windfall, rather than sharing equally with the other spouse in any passive increase or decrease in value.

Active Assets

However, if the increase or decrease in the value of the property during the divorce can be attributed to the actions of a spouse, courts are generally allowed to use the date of separation in setting a value. An example might be if the spouse that continued to reside in the marital home throughout the divorce made several improvements to the property or failed to maintain it after separation. Here, the gain or loss is viewed as the separate property of that spouse, and it would be unfair to have the other spouse enjoy or be burdened by these actions.

Divorce is never easy, but we can help. Learn More
Divorce Law for Pensions & Percentages in Alabama

References

Related articles

Divorce & Equitable Distribution

If you and your spouse are facing divorce, you know the court is going to divide up the assets and debts you've acquired together over the years. Depending on where you live, this can happen in one of two ways. Some states divide everything 50/50. However, the majority make the division based on a legal concept called "equitable distribution."

Distribution of Marital Property in a Final Divorce Decree in Virginia

Property division in divorce can be difficult to understand in equitable distribution states because there are few hard and fast rules. Virginia is such a state. Unlike in community property states -- where courts evenly divide the assets acquired during a marriage -- equitable distribution laws give a great deal of latitude to judges to decide what is “fair.” However, some general guidelines apply.

Ending a Company During a Divorce

For small business owners, divorce may bring even more stress and worry because the spouse who owns the business may be concerned about what will happen to it during a divorce. Depending on the type of business and where the money came from to purchase it, the business may be considered an asset of the marriage; thus, a court may divide the value of that business between spouses when they divorce. However, each state has its own laws addressing business assets during a divorce.

Get Divorced Online

Related articles

Jewelry in a Divorce

Jewelry, especially wedding and engagement rings, can be important symbols of a marriage as well as valuable assets, so ...

Marital Property Laws in Ohio

Couples who decide to divorce often wonder how their property will be split, or how much say they have in the matter. ...

Divorce Laws of Pennsylvania With a Prior Home Ownership

An equitable distribution state, Pennsylvania requires that courts divide marital property in a way that is fair and ...

Is it Legal for Property to Be Removed From a Home During Divorce?

While you may be used to doing what you want with your own property, that may change once you start going through a ...

Browse by category