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  • Writer's pictureSummers Family Law

Don't Let Your Assets Get Lost in Valuation Limbo in Divorce

As a Massachusetts divorce attorney, I see a lot of cases involving disputes over property division. One key issue that often comes up is when to value the marital assets — at the date of separation or the date of the divorce trial. This can make a huge difference in the asset totals, as property values frequently change over the course of a lengthy divorce proceeding. A recent Appeals Court case highlights why the valuation date matters.

The Nagy Divorce: Appreciating Real Estate Assets

In Nagy v. Nagy, the court considered a divorce after a 27-year marriage. The couple owned four valuable properties on Martha's Vineyard. The properties were purchased during the marriage with joint funds and used at times to generate rental income for the couple's businesses.

The properties increased significantly in value from the 2017 separation to the 2021 divorce trial:

  • 25 Averill: $225,000 increase

  • 34 Averill: $155,000 increase

  • 24 Cournoyer: $165,000 increase

  • 50 Old Lighthouse: $140,000 increase

Lower Court Uses Separation for Valuation

The lower court used the 2017 separation date to value the properties. The judge reasoned that the husband had not contributed financially to the marriage after separation. The wife covered all costs and expenses for the properties afterward.

Appeals Court Overturns Approach

The Appeals Court vacated the lower court ruling on the valuation date. The appeals court noted that generally Massachusetts uses the trial date for valuation, except in limited cases where the increase in value was solely due to one spouse's efforts.

Here, the lower court did not sufficiently analyze whether the $685,000 increase was due solely to the wife's post-separation efforts. There was evidence that market conditions also contributed.

Key Takeaways for Divorcing Couples

This case illustrates a few key lessons on property division:

  • In Massachusetts, assets are typically valued at the time of trial.

  • Using an earlier valuation date requires proof that the increase was solely due to one spouse.

  • If the market contributed to growth, the increase may be partly divisible.

Proper valuation is critical for an equitable division. Let me know if you need assistance understanding property division in your own Massachusetts divorce! I'm here to help.

Disclaimer: The content provided in this blog is for informational and educational purposes only. It should not be construed as legal advice and readers should not act upon any information provided without seeking professional legal counsel. The author does not guarantee the completeness or accuracy of the information provided. This blog is not intended to create an attorney-client relationship between the author and the reader.

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