When Does My Paycheck Stop Being Joint?
The date on which earnings (including retirement contributions and other income) becomes separate property again, is the so-called “valuation date.” [1] The valuation date is the date of the initially scheduled prehearing settlement conference, unless the parties agree to a different date, or the court finds that a different date is fair and equitable. [2] In my experience, the Court seldom exercises its discretion to use a different date. One situation warranting a different date is where the parties have been separated for years prior to commencement of the divorce, and have been living separately, with separate accounts, insurance, bills, etc., during the separation period.
In Hennepin County, the default valuation date is the date of the Initial Case Management Conference, which normally occurs within three weeks from filing of the divorce.
If you are concerned about ongoing earnings continuing to be marital in nature, then it is in your interest to lock in the default valuation date by filing the case as soon as possible and shepherding it along swiftly. For example, if you earn six figures, but your spouse is a stay-at-home unemployed parent, it is to your advantage to file the divorce first, and then work on settlement, rather than to mediate and negotiate for several months prior to filing.
Case in point: I had a client once who — contrary to my advice — chose to engage in settlement negotiations for several months prior to commencement and filing of the divorce, rather than filing first and then working on settlement. The pre-filing settlement negotiations did not bear fruit, and because of the delay, the valuation date did not occur until much later than it otherwise would have, with the result that a $180,000 dividend payment received by my client was treated as martial property, when it otherwise would not have been.
The same analysis applies to debts. Debts incurred prior to the valuation date are generally marital, regardless of who incurred them. Debts incurred after the valuation date are generally separate. If your spouse is charging up the credit cards like a drunken sailor, it is in your interest to expedite the divorce proceedings to lock in the default valuation date.
In Hennepin County, the default valuation date is the date of the Initial Case Management Conference, which normally occurs within three weeks from filing of the divorce.
If you are concerned about ongoing earnings continuing to be marital in nature, then it is in your interest to lock in the default valuation date by filing the case as soon as possible and shepherding it along swiftly. For example, if you earn six figures, but your spouse is a stay-at-home unemployed parent, it is to your advantage to file the divorce first, and then work on settlement, rather than to mediate and negotiate for several months prior to filing.
Case in point: I had a client once who — contrary to my advice — chose to engage in settlement negotiations for several months prior to commencement and filing of the divorce, rather than filing first and then working on settlement. The pre-filing settlement negotiations did not bear fruit, and because of the delay, the valuation date did not occur until much later than it otherwise would have, with the result that a $180,000 dividend payment received by my client was treated as martial property, when it otherwise would not have been.
The same analysis applies to debts. Debts incurred prior to the valuation date are generally marital, regardless of who incurred them. Debts incurred after the valuation date are generally separate. If your spouse is charging up the credit cards like a drunken sailor, it is in your interest to expedite the divorce proceedings to lock in the default valuation date.