Part III: How Will My Assets Be Impacted?

In a divorce, each party works to make sure they get what is owed to them. That isn’t something that has changed just because we are facing a pandemic. Our country could be close to another economic crash and values of properties, businesses, and other assets may change dramatically. Aside from child custody, property division is one of the most hotly contested issues in divorce cases.

For couples already in the midst of a divorce, their property valuations will be altered greatly. Assets and property values will likely continue to drop, meaning that divorcing couples will have to deal with the division of debt more so than the division of the asset. For example, if the housing market crashes, the property value in homes before COVID-19 will probably decrease, and buying or selling a home could become more difficult. It may also be difficult to buy out your ex-spouse’s share of the marital home in the division of such. Divorcing parties may have to consider the possibility of having to wait to sell the home until the housing market improves, which can put an additional financial burden on both parties.

Businesses have also been hit hard due to the pandemic. Because businesses have been forced to close or cut back on operations, many have lost staggering amounts of money or have decided to close for good. Business valuations have used methods based on the then realistic presumption that the historical performance of the business was an indicator of its future direction. However, this method may need to adjusted based on how the business is faring during the pandemic. To determine the value a business had before COVID-19, courts will likely need to balance its past performances with its post-COVID-19 performance, a task which could be met with complexity and uncertainty.

Is federal stimulus money an asset that can be divided? Many qualifying Americans received a federal stimulus check based on their 2019 tax filing. If you have not filed for 2019, then your 2018 filing will apply. If you filed “jointly” with your spouse for the 2018 tax year, but have separated from your spouse since filing, then it is best to file your 2019 taxes as soon as possible. You will need to notify the IRS of your updated status of “separated” or “single”. Couples who filed jointly for the 2019 tax year but separated after filing, may need to coordinate division of the stimulus funds. If you cannot coordinate with your spouse, then seek a court order to divide the funds appropriately and consult with an experienced family law attorney.

When dealing with issues regarding property or business valuations and the division of assets, it is important to consult with an experienced family law attorney.

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