Step 1: Pick a Date

Step One is for the judge to decide what day the assets are going to be identified, valued, and characterized. When we say date, we mean a calendar day that you and your spouse will consider the day that you no longer share assets.

Once you are divorced, your assets are yours to keep. You do not have to divide them with your former spouse. But what about assets that you accumulate while your case is pending? And what about assets that you accumulate after your separation but before the lawsuit is filed?

Suppose that you have been separated from your spouse for a year, and the divorce lawsuit has been pending for several months. Suppose also that you get a large amount of money, say, a bonus from work. Since you are still technically married, is your spouse entitled to half of that bonus, even though you have not lived together for months?

Consider the same question from the opposite perspective. Let’s say that your spouse goes on a spending spree while the divorce is pending. Two months ago, you had $50,000 in your joint checking account. Now, it’s down to $12,000. Is that spent money just gone? Or are you entitled to half of the $38,000 that your spouse spent?

One more example. Suppose a couple in the throes of divorce has a large investment account, being managed exclusively by the husband. A few weeks before trial, the stock market takes a nosedive, and the investment account loses a third of its value. Who gets stuck with the loss? And imagine if the opposite happened, and instead of going down by a third, the investment account’s value went up by a third. Who gets the gain?

It’s not enough to simply say that the judge has to divide the assets. The judge has to divide the assets as of a particular day. Like waves in the ocean, the total value of what a couple owns can go up and down over time. What existed six months ago might not exist now, or if it does, it might have a very different value.

Step One will make more sense once we’ve gone through the other steps.