Massachusetts Divorce Law...

Massachusetts Law - At What Date Do We Value the Business?

The business will generally be valued at the trial date, unless there is a good reason for using another date.

So if, for example, the operator of the business has trashed it since the separation, the court might use the separation date to value the business.

Or, if the business has soared since separation thanks to the efforts of one spouse, the court might reward the hard-working spouse by using the separation date, with its lower value, as the date the business is valued.

Cases:

Moriarty v. Stone (1996) 668 NE2d 1338 (The date used for valuation was five years after the initial divorce filing. In this case, the parties had attempted to reconcile in the meantime. The value of the business reflected the wife's continuing work in the business after the divorce filing, though she stopped working in the business some time before the hearing.)

Pare (1991) 565 NE2d 1195 (Where the property division happens after the divorce, the property is valued at the time of the property division, but the statutory factors are considered as of the time of the divorce.)

Savides (1987) 508 NE2d 617 (In this case, eleven years elapsed between the date the parties separated and the divorce. During that time, the husband's efforts caused the business to increase in value. Immediately upon separation both husband and wife began cohabiting with other people and ceased to hold themselves out as husband and wife. Because the increase in value -- to nearly $5 million -- was due to the husband's post-separation efforts, the court used the date of separation, the earlier date, as the valuation date for husband's business. The court concluded that the marriage had effectively ended at the date of separation. This was despite the fact that the husband had generously supported the wife during the eleven year period before the actual divorce. In the divorce, the wife received only a home worth $130,000, plus $245,000 in cash, plus $250 per week in support.)

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