The most visible sign of our unstable economy in the pandemic crisis is the roller coaster stock market, which, at one point, wiped out all of its gains since Trump took office. But almost all economic assets have been negatively affected by the coronavirus, either directly or indirectly. This near-universal devaluation has a direct effect on the divorce process. Divorce entails the division of a couple’s property. How can the marital property be equitably divided when it has suddenly been drastically, but in many cases temporarily, devalued?
Many businesses, large and small, have been forced to close and are no longer bringing in any revenue. In many cities and states, evictions have been temporarily halted. Therefore, if the tenant or homeowner is not keeping up with the rent or mortgage, the landlord or the bank, for the time being, cannot replace a nonpaying tenant with a paying one and thus has lost a stream of income. Car dealers are under so much financial pressure that they deliver the car to the consumer and offering unprecedented deals, such as a six-month grace period before the buyer has to start paying for the vehicle.
Some very nimble businesses have been able to find a way to survive, if not profit, from our strange situation: we’ve all read about the distilleries that are now producing hand sanitizer and automobile manufacturers retooling to make ventilators. But for most, the crisis has been devastating.
Why should a couple divorce now when business and asset valuations are absurdly low and, in many cases, are likely to return to something close to pre-crisis values eventually? Some couples may agree that they prefer to wait and divide their property when valuations are more realistic and appropriate.
At the same time, most jurisdictions are urging or commanding residents to “stay at home.” If the couple has not separated and is now stuck at home together full-time, the atmosphere could become increasingly frosty. On the other hand, if they have separated, will they continue to afford to live in two different places during the current crisis?
Other couples may prefer to try to work out an agreement between themselves now as to how to divide assets, even in their depleted condition, to get the job done. In some cases, one party may attempt to take advantage of the crisis to allow a business to simply die a graceless death, blame that demise on the virus, and thus reduce the accumulated assets he or she must share with a departing spouse. Once the divorce is over, he or she may figure, it will be time to reboot and create a new venture that needn’t be shared.
There will also be cases in which one party might have been willing to be more than generous with the other, offering spousal support in lieu of asset division, or excellent child support. With all of our futures in jeopardy, that spouse may feel much less inclined to be generous. There are circumstances where both spouses may wish to divorce sooner than later. For example, there are government benefits that may be more valuable to the parties divorced than married. Some business risks might not be acceptable to one spouse but necessary to the other. There are times when it is wise to cut the losses and end the relationship.
Couples seeking a divorce are finding themselves in an unprecedented situation in which the usual tried-and-true rules of property division may not apply. For many, the best choice will be, if possible, to wait until the pandemic crisis is over. If they insist on going forward, they should do so with the understanding that some financial loss may be involved that might not have occurred in sunnier times. Family law lawyers trained in the nuances of all circumstances are essential to guide clients to solutions for their futures.