Keep the Divorce Process Moving Despite Financial Uncertainty from COVID 19
The unexpected effects of the COVID 19 pandemic are vast, especially for individuals and couples going through or considering divorce. It is quite possible that the economic uncertainty caused by COVID 19 may be adding several new layers to your divorce, such as making asset division even more daunting and complicated than it already is.
However, despite the uncertainty, there are agreements that can be put in place that can move the process forward and keep you from feeling like your life is being put on hold.
Keep the Divorce Process Moving
It is no secret that the pandemic is causing a much higher level of anxiety around finances and asset division in divorcing couples. While some families are being affected temporarily, others are being affected permanently; and some may not even know how things will end up playing out at the end of all of this.
So, while it may seem like you are at a stand-still with your divorce, until you know exactly how your finances are going to be affected, there are certain conversations you can have that will help you and your spouse get on the same page and come to agreements around these and other issues.
When discussing how an asset will be divided, it is important to keep in mind that you could agree to divide an asset based upon percentages or fixed amounts. This means that if the market fluctuates you would still divide the asset according to the percentage agreed upon at the time of division. Or, if you choose to stick with a fixed amount, you could agree that there may be changes made to that number if there are fluctuations in the market — this way you can still move forward and protect yourself without knowing the end number.
For example, when discussing distribution of assets such as retirement accounts, mutual accounts, brokerage accounts, and stock accounts, you could agree to value them as of the date of distribution which could include considerations for market fluctuations.
Real estate such as a marital home and other real estate investments could likely be affected by COVID 19. While we are still uncertain just how much it will affect the real estate market, one thing to keep in mind is that the process of buying and selling may be delayed right now. So, when discussing real estate, you may want to consider carrying costs associated with those delays. Carrying costs may include monthly utilities, mortgage payments, taxes and property insurance.
Keep an Open Mind
One of the most important things you can do right now is to maintain control of your finances by prioritizing what is best for you, your spouse and your kids (if you have them). You do not want to panic and lose money on assets or make rash decisions. When you are talking with your spouse, try to come to agreements that work best for both of you and make the most financial sense as of our current economic state.
You Don’t Have to Wait
Many people are waiting until the pandemic is over to make final decisions regarding their divorce and division of assets, but you don’t have to. I understand that when you’ve decided to divorce, the last thing you want to do is drag it out. So, keep in mind, as long as you are aware of the possible fluctuations in the economy and you can come to logical agreements, you can still move forward.