Why Valuation Dates Matter

In divorce litigation, determining value is only part of the challenge. Equally important is deciding when the asset should be valued.

Private equity investments can change dramatically over time, making valuation dates a critical component of equitable distribution analysis.

Common Valuation Dates in Divorce Cases

Three dates frequently arise during marital property disputes:
Date of Marriage (DOM)
The Date of Marriage may establish the baseline value of assets owned before the marriage.
This date often plays a central role in distinguishing:

• Separate property
• Marital property
• Active appreciation
• Passive appreciation

Date of Separation (DOS)
Many jurisdictions use the Date of Separation or Date of Filing as the primary valuation date for marital assets.
This date frequently serves as the cutoff point for marital economic contributions.

Trial Date
Some courts also consider current values at the time of trial, particularly when significant changes have occurred since separation.

Understanding Subsequent Events

Valuation professionals often encounter events that occur after the selected valuation date.
These are commonly referred to as subsequent events.
The key question becomes:
Was the information known or reasonably knowable as of the valuation date?

Known or Knowable Standard

A fundamental valuation principle is that fair market value should be based on information available as of the valuation date.
Subsequent events generally fall into two categories:

Confirmatory Events
Events that provide evidence about conditions already existing on the valuation date may be considered.

New Events
Events arising after the valuation date that create entirely new circumstances are generally excluded from valuation conclusions.

Why This Matters in Private Equity Cases

Private equity funds often experience significant changes after separation, including:

• Portfolio company sales
• Capital raises
• New investments
• Carried interest distributions

Courts and valuation experts must determine whether these events merely confirm pre-existing value or represent new information that should not influence the valuation conclusion.

Final Thoughts

Selecting the correct valuation date and properly handling subsequent events can dramatically impact the value assigned to a private equity interest. Careful analysis is essential to ensure equitable and defensible results.
This blog is part of a larger article that appeared in NACVA Quick Read Buzz You can read the full article here.