Posted by Nydia Streets of Streets Law in Florida Divorce

What date is used to value marital assets in equitable distribution? The Florida statutes give a judge discretion in choosing the valuation date as “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.” § 61.075(7), Fla. Stat. (2018). This was an issue in the case McGowan v. McGowan, 1D21-966 (Fla. 1st DCA August 17, 2022).

A divorce was filed after six years of marriage. Three months after a four-day trial, the court entered a final judgment which distributed the parties’ assets, required the former wife to make an equalizing payment to the former husband, and denied the former wife’s claims for alimony and attorney’s fees. The court adopted, verbatim, the former husband’s version of the final judgment. The former wife appealed.

The appellate court noted at the outset “In no way did the final judgment show the exercise of independent judgment by the trial court. The trial court made no oral findings before entering the judgment. And its wholesale adoption of Former Husband’s proposed judgment caused the trial court to make multiple, easily avoidable errors.” The court noted that, for example, non-marital assets were misclassified as marital assets in the final judgment, and marital debts were also misclassified as non-marital.

In valuing the parties’ assets, the appellate court found error. It held “Along with misclassifying assets and liabilities, the trial court erred in the second step of the equitable distribution process— valuing the parties’ assets. The court erred by using different valuation dates for similar assets. It also used several valuations in the distribution scheme that do not match the court’s specific findings of value. [. . .] Although a trial court has discretion in establishing the date for valuation, it abuses that discretion when it uses ‘different valuation dates for similarly situated assets resulting in values favoring one party over the other without explanation or record evidence to justify the different treatment.’ [internal citation omitted].”

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