The valuation date for marital property can be a significant issue in a divorce because asset value is rarely static. Oftentimes, property appreciates after the separation or divorce process has commenced and before the divorce is final. When there are larger assets, such as real estate or business interests, the shifting of one or more such assets makes it more challenging for a marital estate to be divided equitably.

What point in time should a judge use for valuation purposes when dividing the marital estate? Should the judge use the value of the marital estate at the time of the parties’ separation or at the time of its division? Or should the judge use some time in between? Depending on the circumstances of a case, a probate and family judge has discretion in choosing the appropriate valuation date when dividing property in a divorce. The Massachusetts Appeals Court case Obara v. Ghoreishi, however, demonstrates how complex this can be.

The case presents an unusual fact pattern involving a 2013 divorce judgment that divided real estate between the divorcing parties. The husband appealed the 2013 judgment, arguing that the judge made a mistake regarding property division. This appeal resulted not only in a new trial and the postdivorce redistribution of property in 2020 but also in a second appeal. The issue on appeal the second time around: the judge’s choice of valuation date when redistributing the marital property.


2013 Divorce & Equitable Division of the Marital Estate: Trial Judge Divides Five Properties

In 2013, Kayoko (the wife) and Javad (the husband) divorced after about 20 years of marriage. Both Kayoko and Javad are dentists. As part of the equitable distribution of the marital estate during Kayoko and Javad’s 2013 divorce, the probate and family court trial judge divided the parties’ five pieces of real estate, all located in Brookline. Kayoko and Javad stipulated the values for each of the five properties at their 2013 divorce trial.

The trial judge assigned two of the properties to Kayoko and two of the properties to Javad. Kayoko got her residence as well as the parties’ dental office space, which she received along with the parties’ dental practice. Javad got the parties’ former marital residence (his residence at the time) along with a condominium unit, Unit 406.

In addition to these four properties, Kayoko and Javad owned an income-producing rental property. The 2013 trial judge assigned this property to the parties jointly to fund their daughter’s college education. Under the divorce judgment, this rental property would be sold after a certain date. The net proceeds from the sale, after covering the college education, were to be shared equally between Kayoko and Javad.


Husband Appeals: Appeals Court Sends the Case Back to the Probate & Family Court to Revisit Property Division

Javad appealed the 2013 trial judge’s decision and claimed that the 2013 trial judge erred in awarding the parties’ dental practice and its office space to Kayoko. Notably, the office space had been renovated to accommodate Javad, who uses a wheelchair.

In 2016 the Massachusetts Appeals Court vacated the parts of the 2013 trial court judgment that divided the real estate, effectively undoing that portion of the division. The Appeals Court remanded the case, sending it back to the probate and family trial court to revisit the real estate property division.


2020 Remand Judge Orders an Equal Division of Real Property Using 2013 Property Values

In 2020, a new probate and family court judge (hereinafter, “remand judge”) conducted a trial to again determine the proper division of parties’ real estate. At the remand trial, the parties presented evidence showing that all five of the properties had increased in value since the 2013 divorce judgment. Javad also testified that he had since sold Unit 406, which the 2013 judge had assigned to him.

After the second trial, the remand judge issued a 2020 judgment, which redistributed the real estate between the parties. Under the 2020 judgment, Kayoko and Javad kept their respective residences. The remand judge then assigned the office space and Unit 406 (which was sold two years earlier) to Javad and assigned the rental property to Kayoko. It was the remand judge’s intent to divide the property equally between Javad and Kayoko. And so, to effectuate the equal division, the remand judge also ordered Javad to make a cash payment to Kayoko.

When redistributing the marital estate in 2020, however, the remand judge used the 2013 property values–not the properties’ 2020 increased values, thereby creating another issue on appeal.


Wife Appeals the 2020 Remand Judge’s Decision: Argues Judge Used Wrong Valuation Date

Kayoko then appealed the 2020 decision. She argued on appeal that the remand judge erred in using the 2013 property values when redistributing the marital estate in 2020. Kayoko further argued that the remand judge’s use of the 2013 property values (versus the 2020 values) resulted in Javad getting more of the marital estate than her, even though the remand judge intended to divide the marital estate about equally. In dollar figures, Kayoko said she got about $527, 333 less than Javad in the redistribution of the marital estate.


Determining the Valuation Date When Dividing the Marital Estate

The Massachusetts Appeals Court reminds us here that a probate and family judge, when dividing a marital estate in a divorce, must identify the assets and debts and determine their respective values. The value of each such item–and collectively as the marital estate–can appreciate (or depreciate) between when the couple separates and when the judge distributes the estate by judgment.

What point in time should the judge use for valuation purposes when dividing the marital estate? Should the judge use the value of the marital estate at the time of the parties’ separation or at the time of its division (when the judge enters the divorce judgment)? Or should the judge use some time in between?


What’s the appropriate valuation date?

The Appeals Court explains that a probate and family judge may use the value of the marital estate at the time of its division if the divorcing parties’ “contributions to the marital enterprise continue until the date of division.” But if a party stops contributing to the marital partnership before a judge divides the marital estate, the valuation date may be earlier. This earlier date may be the separation date or another date. Also notable, a spouse can continue to contribute to the marital enterprise, even after separation, in various ways, such as continuing to care for the spouses’ minor child during their separation.

The Appeals Court says, “The date for valuing marital assets is typically the date of division — regardless of whether the division occurs at the time of the divorce, or in a postdivorce proceeding…While a judge has discretion to choose a valuation date that precedes the date of division in certain circumstances…the valuation date is generally tied to the date on which the parties ceased their joint efforts in contributing to the marital enterprise…In other words, the valuation date must bear some relationship to the end of the marital partnership.”


Massachusetts Appeals Court Addresses the Property Valuation Date & Appreciation in This Case

This case presents an unusual fact pattern. Here, the parties divorced in 2013. But, as a result of Javad’s appeal, the probate and family court had to redistribute the marital estate years later at the 2020 remand trial. The Appeals Court lays out the steps the remand judge should have taken in 2020.


The remand judge’s first task was to divide the property again. Then the remand judge was required to consider whether there was any property appreciation or depreciation postdivorce and apportion as much accordingly.

The Appeals Court explains that the remand judge had to first divide the property again in 2020, applying the same statutory factors for equitable distribution as if it was the date of the divorce. Then the remand judge “was required to consider” whether there was any appreciation (or depreciation) for the property after the divorce. If so, the judge had to determine if such appreciation (or depreciation) was attributable to one party alone or some independent cause, like increased demand in the market.

Had the remand judge found that the postdivorce appreciation resulted from the efforts of one spouse alone, the judge should have treated the postdivorce property value increase as an “‘after-acquired asset, not subject to division.'” However, if the postdivorce appreciation was not attributable to one spouse alone after the divorce, then the judge should have treated the appreciation as part of the marital estate and divided it between the parties.

The Appeals Court faults the remand judge for rejecting “largely uncontroverted evidence…of significant postdivorce appreciation for all five properties” without making findings explaining his rationale in this case. “Here,” the Appeals Court says, “because the remand judge rejected all evidence of postdivorce appreciation without explanation, he did not make findings addressing whether any postdivorce appreciation of the properties was passive or due to the efforts of one or both parties. This inquiry not only involves consideration of a party’s postdivorce ‘contributions to the upkeep and improvement of the property,’ but also consideration of other relevant contributions, such as a party’s care and support of a dependent child, in determining whether postdivorce appreciation is attributable to one or both parties.”


Appeals Court Sends the Case Back to the Probate & Family Court (Again): Valuing Marital Estate as of 2013 Judgment Resulted in Unintended, Disparate Division; Judge’s Conclusions Aren’t Apparent

Ultimately, the Appeals Court yet again remanded this case for further proceedings regarding property division. According to the Appeals Court, “By valuing the marital estate as of the 2013 judgment, rather than the 2020 division, the 2020 judgment has the unintended consequence of disparately dividing the assets, despite the remand judge’s stated goal of dividing the property equally. Because the remand judge’s conclusions are not apparent and do not flow rationally from his findings, we are constrained to remand the case for further proceedings consistent with this opinion.”

The Appeals Court addresses Unit 406, which sold. Regarding this property, the Appeals Court explains that the remand judge must make findings regarding the property’s appreciation and whether such appreciation was attributable to one party or not. The judge must then divide such appreciation accordingly.

The Appeals Court then turns to the other four units in the marital estate. Regarding the valuation date, the remand judge should explain his rationale for rejecting the appreciated 2020 property values. Alternatively, the remand judge could amend his findings to use the 2020 property value as appropriate. If the findings reflect postdivorce appreciation for any of the four properties, the remand judge shouldn’t stop there. Again, he should make findings regarding whether the appreciation is attributable to one party, both parties, or some other cause. And he then should divide such postdivorce appreciation accordingly.


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