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DETERMINING THE DATE
FOR VALUING MARITAL PROPERTY
IN DIVORCE ACTIONS

2001 National Legal Research Group, Inc.

Courts universally recognize that the division of property in a divorce case is a three-step process. First, the court must determine the contents of the divisible marital or community estate. Second, the court must value the divisible assets. Finally, the court must divide those assets between the parties.

The second of these three steps is the most fact-oriented. In most situations, the law of domestic relations does not value assets; it merely sets forth guidelines to assist expert witnesses in accomplishing this necessary task. Since reasonable experts often arrive at different values for the same asset, the process of valuing property is necessarily discretionary and fact-specific.

Nevertheless, there are still steps the law can take to minimize the scope of inevitable disagreements among experts. One of the most common causes for disagreement between expert witnesses valuing property is a difference as to the date upon which property should be valued. This type of difference is not a matter left to the discretion of experts, for the selection of the date of valuation is a question of policy and therefore an ideal subject for legislative and judicial action. If the parties' experts valuing the marital property are clearly instructed as to the proper date of valuation, they will disagree less often, and their disagreements will be smaller in amount.

This article will set forth the current state of the law on determining the date of valuation. There are generally two different approaches which states take when determining the proper date. In some states, the date of valuation is fixed by statute. Except for situations in which the statutory date is ambiguous, this rule is easy to apply and certain in result. In other states, the date of valuation is a matter for the trial court's discretion. This rule creates uncertainty and is sometimes difficult to apply, but it gives the court greater flexibility to use a date which is equitable on the facts of the specific case at hand.

It is important at the outset to distinguish clearly between the date of valuation of marital property and the date upon which the parties' active efforts cease to create divisible property. The latter date, known generally as the date of classification, is influenced by completely different policy considerations. See generally Ogard v. Ogard, 808 P.2d 815 (Alaska 1991); Roffman v. Roffman, 124 Misc. 2d 636, 476 N.Y.S.2d 713 (Sup. Ct. 1983); Brett R. Turner, Equitable Distribution of Property 5.12 (2d ed. 1994 & Supp. 2000). It therefore lies outside the scope of this article. Nevertheless, many states with a statutory date of valuation tend to use the same date as the date of classification. Cases construing these dual-purpose statutes will be included in the general discussion of statutory dates of valuation, even if the issue presented on the facts was determining the date of classification.

II. Mandatory Date of Valuation

As shown on the table which follows this article, fourteen states currently have a fixed date of valuation. The specific dates chosen vary by jurisdiction between the date of divorce, the date of the final hearing, the date of filing, the date of the first pendente lite support order, and the date of separation.

In a state with a mandatory date of valuation, it is reversible error to value the assets as of any date other than the one required. E.g., In re Finer, 920 P.2d 325 (Colo. Ct. App. 1996); Hankins v. Hankins, 823 S.W.2d 161 (Mo. Ct. App. 1992). But cf. In re Benkendorf, 252 Ill. App. 3d 429, 624 N.E.2d 1241 (1993) (where trial court does not use the mandatory date but neither party objects at trial, issue is waived for purposes of appeal). Nevertheless, valuations as of different dates are not per se inadmissible. As discussed in part V below, such valuations may still be some evidence of what the value was on the date provided by law. In mandatory date-of-valuation states, however, the court's ultimate task is always to determine the value of each asset on the date set forth by statute. Determining the mandatory date of valuation is usually a simple matter of reading the statute. In some fact situations, however, the courts have been required to construe the language of the statute.

Date of Divorce

The date of divorce is generally the date on which the divorce decree is formally entered by the court, and not the date on which the court hearing is held. See Lynch v. Lynch, 164 Ariz. 127, 791 P.2d 653 (Ct. App. 1990); Askins v. Askins, 288 Ark. 333, 704 S.W.2d 632, 633 (1986) ("the time the divorce is entered"); Friedman v. Friedman, 259 Ga. 530, 384 S.E.2d 641 (1989) (date of the final decree); Cummings v. Cummings, 115 Idaho 186, 765 P.2d 697 (Ct. App. 1988); Gravenstine v. Gravenstine, 58 Md. App. 158, 472 A.2d 1001, 1010 (1984) ("date of the final decree of divorce"); Byington v. Byington, 224 Mich. App. 103, 568 N.W.2d 141, 144 (1997) ("entry of a judgment of divorce"; over a strong dissent arguing for the date of separation on the facts); Holliday v. Holliday, 139 N.H. 213, 651 A.2d 12 (1994); Franklin v. Franklin, 116 N.M. 11, 859 P.2d 479 (Ct. App. 1993); Dunlap v. Dunlap, 996 S.W.2d 803 (Tenn. Ct. App. 1998); Horlock v. Horlock, 593 S.W.2d 743 (Tex. Civ. App. 1979) (rejecting argument for date on which an appealed divorce decree is affirmed); Vanni v. Vanni, 535 A.2d 1268, 1270 (R.I. 1988) ("before the final decree for divorce is granted").

Divisible Divorce. Where the parties were granted a divisible divorce in a foreign forum, the date of divorce is the date of the foreign court's decree. Meissner v. Meissner, 759 So. 2d 225 (La. Ct. App. 2000).

Nunc Pro Tunc Decree. Where statute or case law provides that the date of divorce is the mandatory date of classification, the court cannot change the date of classification by granting the divorce decree nunc pro tunc to an earlier date. Doser v. Doser, 106 Md. App. 329, 664 A.2d 453 (1995).

Date of Trial

Where the law requires valuation on the date of trial, and the proceedings are bifurcated, the relevant date is the date of the property division hearing and not the date of the hearing on the grounds for divorce. See In re Walters, 91 Cal. App. 3d 535, 154 Cal. Rptr. 180 (1979); Walter W.B. v. Elizabeth P.B., 462 A.2d 414 (Del. 1983); Lestrange v. Lestrange, 148 A.D.2d 587, 539 N.Y.S.2d 53 (1989).

If the hearing lasts more than one day, the date of valuation is the last day on which evidence is presented. In re Femmer, 39 Colo. App. 277, 568 P.2d 81 (1977); Kuroda v. Kuroda, 87 Haw. 419, 958 P.2d 541 (1998); In re Gustin, 861 S.W.2d 639 (Mo. Ct. App. 1993); see also Finkelstein v. Finkelstein, 268 A.D.2d 273, 701 N.Y.S.2d 52 (2000) (where trial took place over several months, trial court did not err by accepting more current values dating from the middle of trial over values accurate as of beginning of trial). But see Wolding v. Wolding, 82 Ohio App. 3d 235, 611 N.E.2d 860 (1992) (summarily affirming a decision to value assets as of the first hearing date).

Date of Filing

Prior Actions. Statutes referring to the date of filing are generally construed to mean the date on which the successful complaint was filed and not the date of filing of an earlier, unsuccessful action. Otherwise, "it is legally possible for a spouse, by filing a frivolous claim, to . . . deprive his or her spouse of the protection intended to continue during their marriage under [equitable distribution]." Portner v. Portner, 93 N.J. 215, 460 A.2d 115, 119 (1983); see also Seiffert v. Seiffert, 702 So. 2d 273 (Fla. Dist. Ct. App. 1997); Fuegel v. Fuegel, 271 A.D.2d 404, 705 N.Y.S.2d 400 (2000); Nee v. Nee, 240 A.D.2d 478, 658 N.Y.S.2d 440 (1997); Marconi v. Marconi, 240 A.D.2d 641, 658 N.Y.S.2d 702 (1997); Hickum v. Hickum, 320 S.C. 97, 463 S.E.2d 321 (Ct. App. 1995); Shannon v. Shannon, 301 S.C. 107, 390 S.E.2d 380 (Ct. App. 1990).

In Gonzalez v. Gonzalez, 240 A.D.2d 630, 659 N.Y.S.2d 499, 501 (1997), the court used the date of the second action where the parties "reconciled and continued to receive the benefits of the marital relationship" after the filing of the first action. It suggested, however, that the date of filing of the first action might have been proper had there not been a genuine reconciliation. The court turned this suggestion into an actual holding in Lamba v. Lamba, 266 A.D.2d 515, 698 N.Y.S.2d 715 (1999), using the date of the first action where there was no evidence of a real reconciliation.

One court reached a different result where the prior action was dismissed by mistake. In Thomas v. Thomas, 221 A.D.2d 621, 634 N.Y.S.2d 496 (1995), the parties stipulated to the dismissal of their divorce action, and the wife refiled the action on the same day. The husband agreed to the stipulation in the mistaken belief that it was necessary in order for the court to properly consider a custody dispute between the parties, and the wife signed the stipulation with the specific intent of moving the date of classification forward so that there would be more marital property. The court held that under these specific unique facts the date of filing was the date on which the earlier dismissed divorce action was filed.

Multiple Present Actions. When each party files a divorce complaint and the cases are then consolidated, the court should use the date of filing of the first action, even if the divorce was technically granted under the second complaint. Ducharme v. Ducharme, 145 A.D.2d 737, 535 N.Y.S.2d 474 (1988); accord Portner v. Portner, 93 N.J. 215, 460 A.2d 115, 118 (1983) (dicta).

Later Reconciliation. Where the parties had a temporary reconciliation after the date of filing, one court appeared to classify the property as of the date on which the reconciliation ended. See Glazer v. Glazer, 190 A.D.2d 951, 593 N.Y.S.2d 905 (1993). The divorce action had been placed on hold during the reconciliation but apparently was not dismissed. See also Mann v. Mann, 979 P.2d 497 (Wyo. 1999) (home acquired in anticipation of reconciliation, and used as home during reconciliation, was divisible property). But see Fields v. Fields, 625 N.E.2d 1266 (Ind. Ct. App. 1993) (assets acquired during reconciliation were not subject to division).

The reasoning of Glazer is technically wrong, for the date of filing was before the reconciliation. The result reached is entirely correct, however, for the court could not properly have granted a divorce in the action filed before the separation. The reconciliation condoned any preexisting fault grounds and ended any period of continuous separation, and the marriage was obviously not irretrievably broken as of the original date of filing. The court therefore committed at least a technical error in failing to dismiss the action. The correct procedure would have been to make the parties file a new divorce action after the reconciliation failed. In such an action, property acquired during the reconciliation would be acquired before the date of filing. For similar reasons, the result reached in Fields is technically correct, but the result is wrong because grounds for divorce probably were not present.

Foreign Divorce. What if the parties were granted a divisible divorce by a foreign court which lacked jurisdiction to divide property? A New York court held in this situation that the date of filing was the date of filing in the state in which the property was divided. Sullivan v. Sullivan, 201 A.D.2d 417, 607 N.Y.S.2d 937 (1994). The court seemed untroubled by the fact that it was including in the marital estate property which was acquired after the undisputed date of the divorce. The better rule would have been to use the date of filing of the divorce action, or at least the date of the foreign divorce decree. Cf. Meissner v. Meissner, 759 So. 2d 225 (La. Ct. App. 2000) (statutory reference to date of divorce encompassed divisible divorce in a foreign forum).

Date of Separation

Of all the various statutory dates, the date of separation is the hardest to determine. Many marriages end with the thunderclap of a hostile separation, but a significant number of marriages die gradually as the parties spend increasing amounts of time apart from one another. In the latter type of marriage, the date of separation can be very difficult to determine.

The general rule is that the date of separation occurs when (1) the parties cease regular contact with one another (that is, separate physically); (2) at least one party subjectively intends to terminate the marriage; and (3) that party expresses his or her intention through objective conduct.

The first element requires not only that the parties live in separate places but that they cease doing the sort of activities which married persons normally undertake. Where the parties conduct joint activities, they may not be separated even if they have separate residences. See Brotherton v. Brotherton, 941 P.2d 1241 (Alaska 1997) (husband left home in June, but parties lived together for two weeks in August; proper to find that date of separation was in September); Wellner v. Wellner, 699 A.2d 1278 (Pa. Super. Ct. 1997) (parties had separate homes after 1979 but spent weekends together, had sexual relations an average of one time per month, and took trips together; husband continually asked wife to return to his home, which she refused to do only because home was in poor physical condition; proper to find that parties did not separate until 1992); Schmidt v. Krug, 425 Pa. Super. 136, 624 A.2d 183 (1993) (parties must live separate lives and not merely reside under separate roofs; where parties retained a joint checking account, bought property together, and did not regard the marriage as irreparably broken, separation did not occur until wife served husband with separation-related legal documents). But cf. Tybus v. Holland, 989 P.2d 1281 (Alaska 1999) (where parties were physically separated and intention to end the marriage was clearly expressed, mere occasional sexual relations did not terminate separation).

With regard to the second element, where neither party subjectively intends to terminate the marriage, the parties are not deemed to be separated even if they physically live in different places. Jones v. Jones, 835 P.2d 1173 (Alaska 1992) (where parties did not view marriage as functionally ended, separation did not exist for classification purposes); Ramsey v. Ramsey, 834 P.2d 807 (Alaska 1992) (where parties did view marriage as ended, separation did not cease merely because parties continued to have economic interactions with each other).

Under the third element, the parties are not deemed to be separated unless the party who intends to end the marriage communicates that intention to the other spouse. In Hanlon v. Hanlon, 871 P.2d 229 (Alaska 1994), the husband left the wife in 1986. For the remainder of that year, he did not tell the wife that he intended to end the marriage. In 1987, the wife developed breast cancer, and in deference to her condition the husband continued his silence on the issue of divorce. The wife recovered fully in 1988, and at that time the husband told the wife that the marriage was over. The court affirmed a trial court holding that the date of separation was in 1988 when the husband first told the wife that he intended to seek a divorce.

Likewise, in Tybus v. Holland, 989 P.2d 1281 (Alaska 1999), the parties physically separated in September of 1995, but the parties continued to see and visit each other and remained in counseling to try and save their marriage. In April of 1996, the husband changed the locks on his residence to exclude the wife, but the parties' sexual relationship did not cease until October of 1996. The court held that the date of separation was April of 1996, on the basis that the husband's changing of the locks clearly communicated to the wife his belief that the marriage was over. See also In re Hardin, 38 Cal. App. 4th 448, 45 Cal. Rptr. 2d 308 (1995) (stressing the need for both subjective intent and objective conduct); In re Peters, 52 Cal. App. 4th 1487, 61 Cal. Rptr. 2d 493 (1997) (standard of proof is a preponderance of the evidence and not a higher level); Luczkovich v. Luczkovich, 26 Va. App. 702, 496 S.E.2d 157 (1998) (husband intended to separate in April but did not tell wife of his intent until November; proper to use November as date of separation).

Prior Separations. The date of separation is ordinarily the date of the most recent separation with the intent to end the marriage. Thus, if the parties separate, reconcile, and then separate again, the second date of separation is the date of separation for classification purposes. In other words, property acquired during a previous separation is marital property. See Rodriguez v. Rodriguez, 908 P.2d 1007 (Alaska 1995); Broome v. Broome, 112 N.C. App. 823, 436 S.E.2d 918 (1993).

III. Flexible Date of Valuation

In twenty-nine states, the date of valuation is determined by the trial court on a case-by-case basis. Since only fourteen states have a fixed date of valuation, it appears that the flexible date is more popular by roughly a two-to-one margin.

Flexible-valuation-date jurisdictions uniformly prefer to value marital assets on the date of trial. This practice ensures that the property division is based upon current rather than stale financial information. See Jones v. Jones, 942 P.2d 1133 (Alaska 1997) (error to value property before date of trial in the absence of specific supporting reasons); Ogard v. Ogard, 808 P.2d 815 (Alaska 1991); Brosnan v. Brosnan, 817 P.2d 478 (Alaska 1991); McDiarmid v. McDiarmid, 649 A.2d 810 (D.C. 1994); Byington v. Byington, 224 Mich. App. 103, 568 N.W.2d 141 (1997); In re Geror, 299 Mont. 33, 996 P.2d 381, 385 (2000) (date of trial is normally the proper date of valuation, but "in unique circumstances" an earlier date can be used); Sutliff v. Sutliff, 518 Pa. 378, 543 A.2d 534 (1988); Briceno v. Briceno, 566 A.2d 397 (R.I. 1989); Mitchell v. Mitchell, 4 Va. App. 113, 355 S.E.2d 18 (1987); Brandt v. Brandt, 145 Wis. 2d 394, 427 N.W.2d 126 (1988).

Nevertheless, the entire purpose of having a flexible valuation date is to permit the trial court to use a date other than the preferred one where a different date is more equitable on the facts. There are therefore a number of situations in which the courts have approved use of a different date. The next part of this article will set forth and discuss those situations.

Procedural Issues

Multiple Dates for Different Assets. Can the court use a different date of valuation for different assets? A brief scanning of the factors courts consider in setting the date of valuation shows that they do not always apply to every asset. For example, it is essential to value dissipated assets before the dissipation occurred, yet almost never will the entire marital estate be dissipated. The trial court must therefore be free to value dissipated assets before the dissipation, while using a later date of valuing other, nondissipated assets.

Because the factors considered in setting the date of valuation are specific to individual assets, the uniform rule is that the court can value different assets as of different dates. See Fla. Stat. Ann. 61.075(6); Hicks v. Hicks, 580 So. 2d 876 (Fla. Dist. Ct. App. 1991); In re Walls, 278 Mont. 413, 925 P.2d 483 (1996) (specifically noting that dissipated assets can be valued at an earlier date than other assets); Rosenberg v. Rosenberg, 145 A.D.2d 916, 536 N.Y.S.2d 605 (1988); Lewis v. Lewis, 196 N.M. 105, 739 P.2d 974 (Ct. App. 1987); Hurley v. Hurley, 222 Mont. 287, 721 P.2d 1279 (1986); Mitchell v. Mitchell, 4 Va. App. 113, 355 S.E.2d 18 (1987) (dicta); Friebel v. Friebel, 181 Wis. 2d 285, 510 N.W.2d 767 (Ct. App. 1993) (proper to value different assets on different dates, where some but not all of the marital assets were dissipated by one spouse). But see Bednar v. Bednar, 193 N.J. Super. 330, 474 A.2d 17 (App. Div. 1984) (same date must be used for all assets).

At the same time, courts are sensitive to the need to avoid rampant inconsistency in determining the dates of valuation. It is certainly uncommon to use different dates for different assets, and a court which does so without explaining its reasoning on the record may well commit error. See Chotiner v. Chotiner, 829 P.2d 829 (Alaska 1992) (error to value parties' pensions on different dates without providing any explanation for the decision); Luczkovich v. Luczkovich, 26 Va. App. 702, 496 S.E.2d 157 (1998) (error to use early date of valuation for only one asset without explanation).

Also, appellate courts have been particularly careful in reviewing decisions which value marital debts on a different date than marital assets. Where a specific debt was used to acquire a specific asset, the two should normally be valued on the same date. See Noone v. Noone, 727 So. 2d 972 (Fla. Dist. Ct. App. 1998) (error to value real estate and mortgage on different dates); Kirschenbaum v. Kirschenbaum, 203 A.D.2d 534, 611 N.Y.S.2d 228 (1994). There is also at least some authority suggesting that assets and debts should be valued on the same date generally. Ducharme v. Ducharme, 145 A.D.2d 737, 535 N.Y.S.2d 474 (1988) (court must value marital debts on same date as marital assets). This rule could create obvious inequities in situations where particular assets or debts were a product of dissipation or where other facts applying only to one particular asset or debt suggested an earlier valuation date.

Of course, where funds are transferred from one asset to another pending the divorce, it is a particularly acute error to value the first asset before the transfer and the second asset after the transfer. In this situation, the value of the transferred funds is included in the marital estate twice. Crockett v. Crockett, 708 So. 2d 329 (Fla. Dist. Ct. App. 1998).

Time to Determine. Where the date of valuation for substantial assets is a contested issue, it is generally a sound practice to determine the date at a separate hearing well in advance of the hearing at which valuation testimony is taken. See, e.g., Byington v. Byington, 224 Mich. App. 103, 568 N.W.2d 141 (1997). This procedure ensures that all of the witnesses will use the same valuation date, thus removing one key source of variance among different valuations.

Some jurisdictions in fact require that the date of valuation be set in advance of trial. E.g., Va. Code Ann. 20-107.3 (party seeking valuation date before date of trial must file motion at least twenty-one days in advance of hearing).

Findings. Some states require the trial court to make findings of fact on the date of valuation if it chooses a date other than the date of trial. See Thomas v. Thomas, 815 P.2d 374 (Alaska 1991); Nicewonder v. Nicewonder, 602 So. 2d 1354 (Fla. Dist. Ct. App. 1992); Doyle v. Doyle, 815 P.2d 366 (Alaska 1991); Dyson v. Dyson, 597 So. 2d 320 (Fla. Dist. Ct. App. 1992); Bauzon v. Bauzon, 588 So. 2d 660 (Fla. Dist. Ct. App. 1991); Wopata v. Wopata, 498 N.W.2d 478 (Minn. Ct. App. 1993); Rappleye v. Rappleye, 855 P.2d 260 (Utah Ct. App. 1993).

Other states have rejected a findings requirement. Cohn v. Cohn, 155 A.D.2d 412, 547 N.Y.S.2d 85 (1989).

Burden of Proof. The burden of proof is upon the party who seeks to establish a valuation date other than the date of trial. See Willis v. Willis, 27 Mass. App. Ct. 1144, 538 N.E.2d 62 (1989) (where husband introduced no evidence that appreciation was caused by his own unassisted efforts, proper to value assets at time of division).

Valuation After the Date of Divorce

In a bifurcated case, can a flexible date of valuation be set as of some date after the date of the divorce decree, such as the date of a subsequent property division hearing? One recent decision held that a flexible valuation date cannot be set after the date on which the parties are divorced. The court reasoned that valuing assets after the divorce might include postmarital assets in the marital estate. Claughton v. Claughton, 625 So. 2d 853 (Fla. Dist. Ct. App. 1993); see also In re Burns, 903 S.W.2d 648 (Mo. Ct. App. 1995) (error not to revalue assets on remand; court must revalue assets but cannot choose date which is later than date of final divorce decree); Grossnickle v. Grossnickle, 935 S.W.2d 830 (Tex. App. 1996) (property cannot be valued after the date of divorce).

Unfortunately, the reasoning of these decisions was substantially oversimplified. It is true that value earned after divorce is not marital property, and for this reason actively appreciated assets should be given an early date of valuation. (See Part V below.) All appreciation after divorce, however, is not necessarily earned after the marriage. If the increase in value is traceable to inflation, the free market, or other nonmarital forces, it represents mere passive growth; passive growth in marital property before distribution is generally treated as marital. This principle holds true regardless of whether the parties are already divorced. The courts should have remanded the above cases with instructions to distinguish between active and passive appreciation in determining the valuation date for each individual asset.

Fortunately, another line of cases holds that the trial court may choose to value assets as of the date of a postdivorce property division hearing. See Geraets v. Geraets, 554 N.W.2d 198 (S.D. 1996); Parker v. Parker, 897 S.W.2d 918 (Tex. App. 1995) (trial court has discretion to value assets as of any point between the date of divorce and the date of division; approving date of divorce on the facts). These cases recognize that, while new assets acquired after divorce (and active improvements to the value of prior assets) should be nonmarital, it is a fact of life that property often fluctuates in value for reasons beyond the owner's control. When assets acquired before the divorce change in value between the divorce and the property division hearing due to market forces or other nonmarital causes, the court should not be forced to divide the assets as if those changes had not occurred. Future decisions should follow this second line of cases.

IV. Setting a Flexible Date

This part of the present article will set forth and discuss a number of situations in which flexible- valuation-date jurisdictions have employed a date of valuation other than the date of trial.

Since fixed-valuation-date jurisdictions do not permit the trial court to deviate from the mandatory date, the cases set forth here are not applicable where the date of valuation is not flexible. It may be possible in these situations, however, to obtain an unequal division of the marital estate. Perhaps the clearest example of this point is In re Cray, 18 Kan. App. 2d 15, 846 P.2d 944 (1993), where the court expressly chose an inflexible date and then noted that a list of factors similar to the one given below can be considered at the division stage. Cray was reversed by the Kansas Supreme Court, which adopted a flexible valuation date. See In re Cray, 254 Kan. 376, 867 P.2d 291 (1994). Nevertheless, the court of appeals' opinion in Cray is still good evidence that the factors listed below can be considered at the division stage where the date of valuation is inflexible. For a general discussion of how the courts divide property acquired during separation, see Brett R. Turner, Equitable Distribution of Property 8.05 (2d ed. 1994 & Supp. 2000).

Dissipation

The most commonly accepted situation requiring valuation of assets before the date of trial is the case in which one spouse has dissipated marital assets. In this situation, to prevent the dissipating spouse from receiving an unfair windfall, the court will value the dissipated assets as of some date before the dissipation occurred. The assets will then be treated as part of the dissipating spouse's share of the marital estate. See, e.g., Bomwell v. Bomwell, 720 So. 2d 1140 (Fla. Dist. Ct. App. 1998); Hollander v. Hollander, 89 Md. App. 156, 597 A.2d 1012 (1991); Berish v. Berish, 69 Ohio St. 2d 318, 432 N.E.2d 183 (1982); Sutliff v. Sutliff, 518 Pa. 378, 543 A.2d 534 (1988); Parker v. Parker, 996 P.2d 565 (Utah Ct. App. 2000).

An extended discussion of what constitutes dissipation of marital property is outside the scope of this issue. Dissipation generally occurs when a marital asset is spent or otherwise conveyed away during or after the breakdown of the marriage for a purpose which is nonmarital in nature. Where marital assets are spent during separation, most states place upon the spending spouse at least the burden to introduce evidence accounting for the expenditure, and many states place upon that spouse the full burden of proving that dissipation was not present. The most-common types of nonmarital purposes are gifts to paramours and children, gambling losses, and outright wasting of marital property, but dissipation has been found in a large number of other situations. For a general treatment of the law of dissipation, see Here Today, Gone Tomorrow: Identification and Division of Dissipated Marital Assets, 8 Divorce Litigation 21 (1996); Turner, supra, 6.30.

The need to protect innocent spouses against dissipation is so great that some courts have used an earlier date of valuation where there was only a possibility of dissipation. These cases adopted an early valuation date for assets which suffered a drop in value during separation where they were under the sole control of one spouse. In none of the cases was dissipation proven. Nevertheless, the fact that dissipation was possible was held sufficient to support an earlier date of valuation. See Reese v. Reese, 671 N.E.2d 187 (Ind. Ct. App. 1996) (valuing company as of date before substantial drop in value caused by federal environmental laws; focusing mainly upon fact that husband controlled company without identifying any way in which he could necessarily have used that control to avoid the loss); Siegel v. Siegel, 132 A.D.2d 247, 523 N.Y.S.2d 517 (1987); McNaughton v. McNaughton, 412 Pa. Super. 409, 603 A.2d 646 (1992) (result is particularly appropriate for small businesses under the unilateral control of one spouse alone); Benson v. Benson, 425 Pa. Super. 215, 624 A.2d 644 (1993).

Agreement

The parties are free to stipulate as to the date on which their assets will be valued. Such a stipulation is binding even if the law would normally require use of a different date. See, e.g., Gurbacki v. Gurbacki, 270 A.D.2d 807, 708 N.Y.S.2d 761 (2000); Traylor v. Traylor, 19 Va. App. 761, 454 S.E.2d 744 (1995); see also Hatten v. Hatten, 917 P.2d 667 (Alaska 1996) (trial court did not err in valuing assets at time of trial as appellant's attorney conceded at trial that valuation on the date of trial was proper).

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