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Going through a divorce can be one of the most stressful experiences in a lifetime. Divorcing in a pandemic can present even more challenges for separating couples.
The pandemic has created a lot of uncertainty in all aspects of life. More time being spent at home has caused couples to reassess their marriages and has sadly driven some couples to separate.
The pandemic itself has had a direct impact on the value of marital assets that are available to divide on divorce. The stock market has been hit hard, which has driven down the value of some investments, such as shares and pensions. It may well be that investments that were once quite valuable “nest eggs” are now worth much less and couples will be left to negotiate how to divide assets fairly. For example, some investments will be more risk-laden and volatile than others. It would not be fair for one party to be left with all of the high-risk assets, for example.
The value of some businesses has also been affected by the pandemic and valuations carried out in the present economic climate may be much less than in pre-covid times. It may well be that the capital within the business has been used up in keeping the business afloat or that the value of stock has depleted. Whatever the scenario, it is very likely that the pandemic has had some effect on the value of many businesses. Businesses are often valued on divorce as part of the financial disclosure process and an assessment made as to whether any cash can be extracted from the business as part of the divorce settlement. If that is no longer an option, there will be less cash to work with when distributing assets between spouses.
Of course, in some cases, the pandemic has actually had a positive impact on business and has increased the value of some businesses. For example, companies offering online services and goods may have seen an upturn in business due to local and national lockdown measures.
Each case will turn on its own facts but the housing needs of any children will always be the primary consideration and one of paramount importance. If the value of investments, businesses and/or other assets have depleted, careful consideration needs to be given as to how the remaining assets are divided to ensure that housing needs are met, as far as possible.
The positive news is that the property market in many areas does not seem to have been affected and in fact, in some areas, properties have increased in value, despite the financial uncertainty. There still appears to be high demand for properties and people can move home, even in the strictest of lockdowns. This is welcome news to couples who have recently separated, who need reassurance that they will be able to sell up and move on.
Myerson’s specialist family lawyers are here to help provide more information regarding advice on separation and divorce. Please call Myerson’s family solicitors on 01619414000 or email firstname.lastname@example.org.