Valuation of Assets and Liabilities

This is the second post in a series on equitable distribution in New York.  The first post addressed the first two steps in a four part equitable distribution analysis.  This post will address the third step.

The third step in an equitable distribution analysis is the valuation of assets and liabilities.  The dates used to determine the value of assets are to be set by a court or by agreement of the parties.  Generally, valuation of marital property is properly fixed at the commencement of the action, unless doing so would be “patently inequitable” or, in plain English, very unfair.  Likewise, the court also has discretion and flexibility to determine the most appropriate date for valuation of debts and liabilities since the commencement date may not always be the most equitable or appropriate date to use.

Depending on the particular circumstances of the case, the court may appropriately fix different valuation dates for different assets.  Houses usually should be valued as of the date of trial rather than at the commencement date of the action because of the passive nature of their appreciation.  On the other hand, deferred compensation accounts usually should be valued as of the commencement date.  Any post-commencement contributions and appreciation should be the separate property of the titled party.  Any appreciation on the marital portion of the deferred compensation would be marital property.

The final step in equitable distribution is to distribute the assets and liabilities in an equitable manner.  This is the most complex part of equitable distribution since it involves a subjective analysis.  This will be explored in the final part of this series.

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