Question: My wife and I are in the second year of our divorce proceedings. Our children are grown, but the major problem seems to be that the lawyers can’t agree on the value of our assets or the date on which our assets should be valued. We have our business (in which we both worked), a stock portfolio, my 401 (k), her IRA’s, our home, and some savings. We have been married for 37 years and each of us is 62 years old. Because of cash needs, we have both been required to go into our savings and other funds to make ends meet and pay lawyers. One lawyer says that the valuation is as of the date the case was filed two years ago, while the other insists that each asset can be valued on a different date. My wife and I don’t know who is right, but we do know that if something doesn’t happen soon, we will both be broke. Any assistance you can give would be much appreciated.

Answer: Generally speaking, and certainly subject to the law of your state of residence, the courts have broad discretion in deciding when marital property is to be valued. While assets are generally valued as of the date marital litigation begins, if assets appreciate or depreciate, depending on the situation, the husband and wife may well be entitled to share in any appreciation or depreciation that takes place after the date the marital action is brought, but before a divorce is granted.

Because the year-plus wait experienced by you and your wife is not all that unusual given the sheer number of matrimonial cases handled by family court judges, it is also not unusual to see asset values fluctuate between the date of filing and a final order. For obvious reasons, judges must have the ability to take into consideration any increase or decrease in assets.

For this reason, it appears to be within the province of the judge to choose different valuation dates for different assets, again depending on not only if they increased or decreased in value, but also why. For example, if you were running your business and the value increased based on your labor between the date of separation and the date of divorce, it would probably not be fair for your spouse to benefit from the appreciation. At the same time, if your stock portfolio diminished in value based on market conditions and is not the fault of either of you, it would be unfair not to value the asset as of the date of final division.

A further complicating factor is your statement that both you and your wife have used some of your assets to live on during the proceedings. This presents a somewhat thorny dilemma because if both of you are capable of working and spent your assets instead, the issue of dissipation raises its ugly head. If these expenditures, however, were not dissipation but for living expenses, support, and attorney's fees, these may well be considered to be valid marital purposes that must be considered fairly in the mix.

Bottom Line: The longer that cases remain pending, the more issues arise such as you describe. For this reason alone, early settlement, if possible, remains the best alternative.