Most of you have never heard of the term or have any idea what I am talking about. If you have gone through a divorce, you might have come across it though. In a divorce what you and your soon to be ex-spouse has, needs to be divided up. The general rule is that each of you get half of all assets, i.e. cars, houses, savings, and, pays half of all debt, i.e. mortgages, credit cards, etc., regardless of whose name the asset or debt is in. There are exceptions that I will not get into here, it would be a long discussion full of legalese, but this is usually what happens. In order to divide things up values must be determined, and as values of assets and debts change over time, we buy things, sell things, make payments on loans, values can go up or down on their own, a date needs to be picked for when values will be assigned. Minnesota law says this is when the first court hearing is held, unless the judge decides otherwise, meaning, it is up to the judge. Many judges in my part of the state value as of when people separate, which makes sense to me, but, in other parts of the state they tend to go with the first court hearing. Going with the first hearing, when people have been separated for a long time can mean that one spouse is responsible for half of the debt that the other spouse ran up after they moved into separate homes and were leading separate lives. It can also mean that one spouse gets half of assets that the other spouse worked for and paid for after their separation. When spouses disagree on their valuation date the judge decides. There are cases that have gone to higher state courts about the issue, those cases are considered by the judge in deciding whether to value at the first court hearing, or the separation date.
When people separate and get their divorce going in court right away, valuing as of when the case goes to court is not a problem. When they have led separate lives for years it makes much more sense to me to value as of when they went their separate ways. If you are getting divorced and have been separated for a while, make sure your attorney knows the law on valuation dates, and is in the best possible position to argue for a valuation date that is fair to you.