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Why valuation dates are important

Dividing up marital property can be one of the most difficult (and potentially most contentious) aspects of a divorce case in Westminster. This is particularly true if business assets are included in such proceedings. Typically, when one spouse owns and operates a business, whatever increase in value that the business experienced during his or her marriage is considered to be a marital asset. Thus, the valuation of a business is crucial in determining each spouse's interest in this asset (as is the date on which the valuation occurs). 

Per Forbes Magazine, business assets are typically labeled "active assets" during property division proceedings due to the fact that their value can be greatly influenced by their owners. Active assets are often valued at the time a couple choose to separate, while almost all other assets to be divided between a divorcing couple are valued as close to the trial date of their proceedings as possible. The reason why business assets are typically valued this way is to deter a business owner going through a divorce from intentionally neglecting his or her company in order to diminish his or her soon-to-be ex-spouse's interest in it. 

Section 2552 of the California Family Code shows that the state does indeed value assets subject to property division at the time of trial. There are, however, general exceptions to this rule, one of them being cases where one spouse owns a business. When that happens, the court does indeed typically set the valuation date at the date of separation. While this is meant to keep a business owner from driving its value down, it also rewards solely him or her for increasing its value through his or her own individual efforts after having separated from his or her spouse. 

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