Separation Valuation Date: Your Bookend To Money In Separation

The date of separation, also known as the valuation date, is a crucial marker in the separation and divorce process. It is essential when evaluating net family property and equalizing assets. This involves comparing the marital property from the date of marriage with the property acquired by the date of separation.

Importance of the Date of Separation

The date of separation is a key factor in determining what each spouse leaves the relationship with compared to what they brought into it. It’s important to clearly establish the date of separation, whether through a text, email, or letter to your former spouse. This clarity is crucial in accurately dividing property, which directly affects your financial situation post-divorce.

Legal Aspects and Considerations

In any divorce case, the court may consider the date of separation when making decisions about child custody, spousal support, and the division of community property. For a married couple, this date marks the final break in their relationship, impacting both short-term and long-term financial considerations.

Actions to Take

To ensure the date of separation is properly documented, it’s advisable for couples to seek the guidance of a divorce lawyer. This professional can provide expert advice on how to document the separation in accordance with the family code, ensuring all assets acquired during the marriage are accounted for accurately and legally.

The date of separation and the valuation date are two distinct concepts in separation and divorce, each serving a specific purpose in ending a marriage’s legal and financial aspects.

Date of Separation

Definition: The date of separation is when spouses start living separately and apart, marking the end of their marital relationship. This date signifies the point at which at least one spouse decides to end the marriage and communicates this intention through actions or words.

• Significance: The date of separation is crucial because it affects various aspects of the divorce process, including:
  Eligibility for divorce: In many jurisdictions, couples must be separated for a certain period (e.g., one year) before filing for divorce.
• Spousal support: The duration of separation can impact spousal support calculations.
  Custody and access arrangements: The date can influence temporary arrangements for children during the separation period.

Valuation Date

Definition: The valuation date, also known as the “date of valuation,” is the specific time used to assess the value of the couple’s assets and liabilities for the property division. This date is often the same as the date of separation but can sometimes differ depending on legal and financial considerations.

Significance: The valuation date is essential for determining the division of marital property and debts, including:

• Equalization payments: It helps calculate each spouse’s net family property, leading to equalization payments to ensure a fair division of assets.
• Financial disclosure: Both parties must provide a comprehensive list of their assets and liabilities as of the valuation date.
  Asset division: The valuation date ensures that all financial assessments are based simultaneously, providing a transparent and equitable basis for dividing property.

Key Differences

• Purpose: The date of separation marks the end of the marital relationship, while the valuation date is used to assess the financial value of assets and debts.
• Impact: The date of separation influences legal aspects like spousal support and eligibility for divorce, whereas the valuation date directly affects the financial settlement and property division.
• Timing: Although often the same, the date of separation and valuation date can differ if the court or parties decide that a different date better represents the fair value of assets for division purposes.

Understanding both dates is crucial for navigating separation and divorce’s legal and financial complexities. Working with a Divorce Mediator or Certified Divorce Financial Analyst can help ensure that these dates are correctly determined and that your rights and interests are protected throughout the process.

Although it may be memorable for other reasons, the date of separation is a vital milestone for divorce proceedings. There are several reasons for this. 

First, the value of assets and debts of a couple is usually determined as of the date of separation. This is also why it is often called a “valuation date”. Usually, the value of a property may vary, depending on the date on which it is valued. And for the purpose of equalization proceedings, it is the value of your property on the date of separation that matters, regardless of its current value. 

For instance, assume you own a rental property valued at $70,000 on 5th January, and then $50,000 on 16th. If your date of separation falls on the 5th you have to share the value of the property at that date. But if it falls on 16th, your liability is much reduced, even if the value of the property later rises.  

Second, the date of separation is also the date on which support obligations usually commence. The obligations may accrue from or be valued from this date in favour of whichever party is awarded support. 

Third, the limitation period for property equalization claims begins to countdown as from the date of separation. Accurately determining the date of separation may be vital to ascertaining how much time you have left to file the relevant divorce claim. 

Seeing its importance, the next question is how do you determine the date of separation? The Family Law Act (s. 4(1)) regards the “valuation date” as the date from which the parties separate without any reasonable prospect that they will resume cohabitation. For non-cohabiting couples, it is the date from which a reasonable person would believe the relationship is over. 

However, neither of these help couples accurately determine the date of separation. Many questions can still arise, such as what happens if they are still living under the same roof. The court will consider several factors in coming to a conclusion, including whether they: 

• Share the same room 
• Go out together as a family 
• Eat meals together 
• Take vacations together 
• Have separated their finances 
• Report themselves as married or separated on their income tax returns 
• Tell other people they are separated or together. 

In the case of Oswell v Oswell, the Ontario High Court of Justice court set out criteria that may be considered to determine is separation has occurred. These include: 

• Physical separation between the parties
• Withdrawal by one or both spouses from matrimonial obligations 
• Absence of sexual relations 
• Absence of joint social activities, changed meal patterns, breakdown of communication 
• Non-performance of household tasks that are peculiar to either spouse
• Separate plans for assets

If you are confused as to how these factors apply in your case, a professional mediator can provide necessary guidance. 

There are several important milestones that spouses who have decided to obtain a divorce must keep in mind. While some of these important dates and time limits depend on certain divorce issues such as property division claims or custody, other time limits apply to most divorces. 

For instance, since child or spousal support often need to be settled in a divorce, both parties need to understand what amounts to the date of separation and how to calculate it. Other dates relating to time limits for filing equalization of property, financial disclosures etc. may also be important. 

This article, explains these important dates in Ontario divorce proceedings, particularly the date of marriage and date of separation. The article also explains the implication of these dates and how to determine when they start counting.

In every divorce proceeding that involves a money issue, it will be necessary for both parties to provide a full picture of their finances. These financial disclosures are necessary in order to determine several issues including equalization payments, child support or spousal support. 

For instance, judges are required to set child support payments in accordance with the table amount under the Child Support Guidelines. It will be impossible to determine the appropriate amount without an accurate understanding of each spouse’s finances. This is why financial disclosure is mandatory when there are money issues to be resolved. 

According to Rules 13(3.2) & (3.3) of Ontario’s Family Law Rules, each spouse must make financial disclosures to the other spouse within 30 days of serving their divorce application or answer. The documents required for this financial disclosure are extensive, including the following: 

• Income tax returns and notices of assessment for the past 3 years 
• Most recent pay stub 
• Statement of performance-related pay
• Statements of bank, RRSP and investment accounts as at the date of separation and date of marriage 
• Statements on the type and number of shares held in any public company and several other documents. 

It is important to be accurate in making these financial disclosures as courts do not look kindly on parties that try to hide their money. Parties that wish to have more control over how their finances are treated during divorce can choose to go through mediation instead.