The Impact of Covid-19 Upon Divorce and Financial Settlements
Coronavirus will not just have a devastating impact on health, lives and the economy but also family life. It is predicted that divorce rates will spike. We only need to look at the aftermath in China to give validity to that prediction, along with the fact that us divorce lawyers see an increase in workload immediately after Christmas and the Summer holidays, which are the times when spouses spend a greater amount of time with each other. The rates could be even greater as the confinement will be further compounded by the stress about health and family finances. For some couples it will prove too much.
Whilst the country is at a standstill, divorces can still be started despite the pandemic as we and the judicial system embrace remote working. Financial settlements can also be negotiated either on a voluntary basis or through the court process. Covid -19 does not need to stop you from progressing your separation as the difficulties brought about by Covid-19 can be navigated with legal advice. This begs the question:
What difficulties has Covid-19 created when it comes to financial settlements?
There are two main difficulties, the first being quantification of assets and the second being implementation of settlements.
Quantification of assets
Quantification of assets is paramount to giving advice and negotiating a settlement. It is difficult to obtain an accurate valuation of properties, businesses, investments and pensions when the values are fluctuating due to the financial uncertainty we now face. Advice needs to be taken to decide whether to involve experts or to include a fall back position in your settlement or whether it is worth holding off on settlement for a short while until there is more market certainty.
Implementation of financial settlements
Difficulties may arise when giving effect to a financial settlement, but there is potential to vary certain aspects of orders.
Spousal maintenance – if your order provides for the payment of spousal maintenance, these can be varied up or down and duration can be increased or reduced. At this time, it is most likely there will have been income changes and you could apply to vary the payment to reflect the change to your circumstances.
Lump sum payments by instalments – these can be varied if justified, but it is rare for the amount to change and most likely that you will be given more time to pay.
Practical elements – if the fundamentals of the settlement do not change, terms relating to the practical aspects of the settlement may be varied. For example, an order that provides for an immediate sale of a family home could be changed to give more time for sale, to take account of your local estate agents being closed etc .
It’s too early to say whether Covid-19 can be used as justification for setting aside a financial settlement entirely, as you will be arguing the ‘unforeseen’ event has invalidated the fundamental basis upon which the settlement has been reached. It is a complicated area of law and case law indicates it will only be arguable in a small number of cases. However, sooner or later, the argument will be tested and legal developments will arise as a consequence of Covid-19.
Perhaps what Covid-19 has inadvertently emphasised is the importance of seeking legal advice. You can then be told the best options for you taking account of your circumstances, enabling you to make an informed decision as to how to proceed.
Gianna Lisiecki-Cunane is an experienced family lawyer in dealing with divorce and complex financial settlements, she can be contacted to arrange a no obligation virtual consultation by phone or video call on 01457 761883 or 07501054190 or email@example.com.