An important — and often controversial — part of any divorce is the division of marital property. In our state, the division of the marital estate between the parties must be equitable, meaning based on fairness under the circumstances. Of course, no fair division is possible without first assigning reasonable value to each marital asset.
One variable in the value of an asset can be the passage of time. Some things depreciate or appreciate in value because of market forces beyond a person’s control, or because someone took action to change the value.
Choosing exactly which date the marital assets’ values will be based upon can be a contentious issue in many divorces. If the parties can negotiate a marital settlement agreement, they will need to agree to the value of marital assets as part of the negotiation. But if the property division ends up in court, the judge overseeing the divorce will equitably divide the marital assets for the parties, including designating the valuation date.
A court may use the date the couple separated, the date they filed for divorce, the date of the trial or another date entirely.
Nebraska Supreme Court determines date-of-valuation rules
On May 10, 2019, the Supreme Court of Nebraska ruled for the first time that a state trial court is not limited to only one date for asset valuation but may assign different valuation dates to separate assets. In Rohde v. Rohde, the husband objected to the judge’s use of various dates for different asset valuations, arguing that the court should have used only one valuation date for the entire marital estate.
The court disagreed, explaining that the overarching rule is that the valuation date must be rationally related to the property at issue — a rule that does not prohibit the use of different valuation dates for different properties. The court said that while the use of one date for the valuation of all the assets will often be equitable, the judge must have discretion to use different dates when that would be fairer under the particular circumstances of a case.
The Supreme Court reasoned that it can be difficult for a district court to set only one fair date for all assets and that it would not “tie the hands” of district court judges by restricting them to only one valuation date for a variety of asset types.
The Rohde example
In the Rohde case, the Supreme Court said that the trial court had not abused its discretion by using these dates that were rationally related to the property at issue:
- The date of filing for a home, business accounts and business properties because these assets only benefited one of the parties after separation
- The date of trial for another home, jewelry, household goods, vehicles and joint accounts because the values had not changed and both spouses had used the joint accounts up until trial
- Specific, single dates submitted by the parties in evidence to value investments and equipment sales
An attorney can answer questions about property valuation issues in Nebraska divorce.