At the best of times, dealing with finance is a source of stress for many Canadians. The 2020 Financial Stress Index found that money is the number one cause of pressure by a large margin, and one of the primary reasons couples divorce. For couples who are divorcing in the middle of the COVID 19 pandemic, the financial and emotional implications are especially severe. As economies around the world grapple with the lockdown and begin to reopen, divorcing couples’ financial stress is at an all-time high. Uncertainty about their financial future, market volatility and reduced pay due to job and business loss bring very real worries to the table. What are some of the issues you need to think through as you contemplate divorce in a pandemic? Read on to learn more.
Staying Calm and Focusing on Your Endgame
You decided you no longer wish to be with your partner before the pandemic hit. Unfortunately, there was no way to know that you would be going through your divorce proceedings during a pandemic. The reality is no one knows the future. During a time of uncertainty, it is tempting to want to know how everything will turn out. The truth is you will still need a plan to get to the other side, even when we don’t know what the other side looks like. So, take a deep breath, stay calm, and limit your consumption of the news. Surround yourself with a capable team of professionals that can help you prepare for what comes next. On the list should include a trusted family lawyer, accountant and financial professional. Take in only the need to know information such as benefits available to you from government programs. Check them out here.
Staying calm is also essential when dealing with your former partner, especially at a time where they may also be dealing with unprecedented levels of stress as well around finances. As courts close down and are only dealing with a select number of cases, it’s even more critical. Crucial conversations around money to keep your household afloat may need to occur, especially when income stops suddenly. You and your former partner should also contact your bank or landlord to see what programs are available to you. You can defer your payments if need be. This can be much-needed help if you are either the payer or recipient of child support payments that can no longer be made due to the shutdown.
Rethinking the True Value of Matrimonial Assets
If your settlement was finalized in February and you agreed to pay a sum for family assets, it could be significantly lower due to the pandemic. Are you still obligated to pay that amount? And if you are the recipient, are you still owed that amount? What is the real value of your family assets? The family home, stock portfolio and any business assets that were evaluated before the pandemic?
Keep in mind family assets and debts are typically equalized based on the date of separation. The value of assets is based on the date of separation, even if you both separated before the pandemic and the value of your home or investment dropped since the separation.
If you are affected by this, you will likely be able to dispute these facts once courts open more broadly.
This is also true for business assets that were evaluated to finalize divorce proceedings, and now the business value is adversely affected by the pandemic. Can the business owner request a new valuation? Again this will likely depend on the facts of your circumstances and if you can prove that your company will be impacted permanently by the pandemic.
Maintaining Child Support Payments
The courts are still opening up and, at this point, still hearing only emergency cases.
If your former partner is not in a position to pay child support, what are your options? If you can no longer afford to make the payments, is there a way to change the agreement?
Unfortunately no. In most cases, you will have to wait until the court opens to make any changes to your agreement. If you are the payor, you are at risk of your partner’s contract being enforced if you fall behind on your obligation. This means your best option, whether you are the payor or the recipient, is to negotiate with your former partner to come up with the best solution. There is no magic bullet in a pandemic on how to deal with this situation. The most desirable outcome would be if you and your former partner can get on the same page. Come up with the best-case scenario to meet the financial obligations needed for your family. You can also reduce tensions by becoming familiar with the economic benefits available to you and your former partner. Remember, there is no playbook for a global pandemic.