For a divorce settlement, isn’t the date of separation a determining factor in the amount that is subject to division?

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For a divorce settlement, isn’t the date of separation a determining factor in the amount that is subject to division?

My wife and I are going through a divorce. After consulting with my wife and her attorney, a settlement agreement was drafted outlining the terms of my property, alimony, and division of retirement assets. My question is this – in terms of agreeing to a 50% split of my 401k benefits, isn’t the date of separation a determining factor in the amount that is subject to the 50%? if the value of my 401k account went up after my wife moved out of the house, the appreciation in value after she left is not subject to the 50% split – correct? An if so, can’t I stipulate in the agreement?

Asked on July 27, 2011 California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Generally speaking you are correct:  the date of separation is the date used to value assets in a marriage for purposes of distribution.  But the date of separation can be different for different types of assets and the courts can use different dates for assets that have active contribution from a spouse that contributes to the increase in value or passive contribution.  Although the courts prefer to use a single date they have recognized that maybe multiple dates for different assets are in order.  So they can use a date of  filing legal papers (separation or divorce) or date of trial even. For example, in CA a professional pracitce is valued as of the date of separation to make sure that no income earned in post separation is included in the community estate.  The parties can indeed agree to a date certain or it can be a point of negotiation or litigation.  I would strongly suggest that you have the agreement read by a lawyer if only on a consultation basis.  Good luck.


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