Nationwide social distancing policies as well as stay at home orders are generating a multitude of unanticipated consequences of the COVID-19 (novel coronavirus) pandemic. The number of divorces are skyrocketing and all of this is happening as courts are closed and asset values, especially stock portfolios are exhibiting unprecedented volatility.
COVID-19 will affect property division and the values of many of your assets, including real estate, retirement accounts, stock accounts and brokerage accounts.
As markets are fluctuating daily, there are options that can be utilized to divide these types of assets. The value of an asset to be divided can be determined as of the date of distribution – meaning the value will be determined on the actual date of distribution of the asset – taking into consideration market forces. Parties may reach an agreement that the asset can be divided based on percentages. The parties would then determine the percentage each spouse will receive and identify the value of the asset on the date of distribution. Another option is for the parties can agree on a fixed number for each of them and agree to adjust that number based on market forces.
Real estate valuation is based on fair market value. It is uncertain whether real estate values will be impacted either positively or negatively but it is certainly something to keep an eye on. There could also be delays in selling real property. Any possible delay should be considered when determining the division of property and possible carrying costs.
While the courts are closed and not handling matters other than emergencies, now is the perfect time to try and negotiate a settlement in your case. We can use this time to move things forward and reach an agreement, thereby decreasing the overall cost of litigation.