In a divorce proceeding, a court distributes marital assets through equitable distribution. It is important that the assets receive a correct valuation. The receipt of an overvalued asset through equitable distribution can dilute a spouse’s share of the total marital estate. When the assets are valued can be just as important as the final value attributed to the asset.
Florida Statute § 61.075(7) spells out what date a court may use to value an asset. That section provides in relevant part:
The date for determining value of assets and the amount of liabilities identified or classified as marital is the date or dates as the judge determines is just and equitable under the circumstances. Different assets may be valued as of different dates, as, in the judge’s discretion, the circumstances require.
Section 61.075(7) gives a trial court tremendous latitude when valuing a marital asset. By that, the court can select a date of valuation it determines is “just and equitable under the circumstances.” In Leonardis v. Leonardis, 30 So.3d 568 (Fla. 4th DCA 2010), the trial court valued the marital residence at the date of filing the divorce petition. On appeal, the wife in Leonardis argued that the trial court improperly used the date of the divorce petition to set the value of the home. The appellate court agreed, ruling that “[g]iven the widely acknowledged real estate downturn and the undisputed evidence of the general decline of property values in Palm Beach County during the pendency of these divorce proceedings, selecting the date of the filing of the petition as the valuation date for the property would have been an abuse of discretion.” Id. at 571.
It is important for litigants in a divorce to clearly articulate the basis for the date of valuation. This is especially true when property values affect the outcomes through equitable distribution. As one court observed, “[w]hen property valuation is an integral part of the court’s entire plan of distribution, confusion as to value requires reversal of the property award.” Wendroff v. Wendroff, 614 So.2d 590, 593 (Fla. 1st DCA 1993), quoting Ross v. Bandi, 566 so.2d 55, 56 (Fla. 4th DCA 1990); see also, Saxton v. Saxton, 454 So.2d 575 (Fla. 4th DCA 1984).