The public health crisis has put many couples in the position of being alone, together. Relationship issues that may have been problems lingering in the background can come to the forefront when the only people couples can spend time with are one another. They now have the time to consider whether they will stay in or if they must get out. The question is no longer if, but when they will file for divorce. And for many, they will seek an attorney when they have some space from all of the togetherness. If you find yourself in that position, there are three financial issues you should give some thought to now so you are better prepared to start the process.

  1. Begin with examining your current financial position and gather information about your assets and your liabilities – whether in paper by looking at statements of value or by speaking with your investment or financial advisor. There has been a major shift in the stock market, and investment values have decreased. However, the level of investment risk you may have assumed on January 1 may not be the risk level you are comfortable with if you are going to begin the divorce process later in 2020. Consult with your financial advisor and consider simple shifts to stabilize values as much as possible on a short-term basis. If you do not have the relationship with your family financial advisor, ask for a referral to a new one so you can learn about the assets and options available to you to protect what you have. No one is going to tell you the stock market is going to recover quickly, but you want to know that you will have assets to divide. Information will help you make informed decisions moving forward.

  2. Historical income may not be a reliable gauge of someone’s likely future income. Attorneys and even experts may spend considerable time trying to determine what the likely or expected income of one or both parties may be in the future. Bonuses may not be received in the same amounts as in the past or even at all. Companies may have cut salaries, but how long will those cuts be in place? What income can be counted on to determine child support or spousal support? What income will be available to pay household obligations or service debts? In the pre-pandemic period, attorneys could use that historical data to argue to the court to use specific incomes or ranges of income. In the post-pandemic period, it will not be as simple, and attorneys may have to use experts to opine to the court about parties’ likely future incomes. With the current unemployment rate nearing 15%, we find ourselves in economic conditions not seen since the Great Depression. And no one in your case has any experience in those circumstances.

  3. Life, as we all know it, has changed due to the pandemic. Lifestyles will change too for the vast majority of people. Spending time considering needs and wants will never be so important as it is during the post-pandemic divorce process. Spend time considering yours, your soon to be former partner’s and those of your children. A court will make determinations about the reasonable needs of all the parties. Work on household budgets, understand what life looks like now and project out what your reasonable budget is moving forward. This will help in determining whether one party can keep the marital home or whether it is time to sell. It is not reasonable to think that you can rely on savings to fill budget shortfalls post-divorce. The time invested in budget planning will pay dividends with peace of mind.

Knowledge is power in the divorce process. Invest the time and consider these financial issues so you are best prepared to begin a divorce when you determine you have the space to do so or when we find ourselves in that (hopeful) post-pandemic period.