We are currently living in very uncertain times, with the Coronavirus pandemic having wide reaching implications for many people. There is a good deal of financial uncertainty at the moment, with many people being furloughed from work which is impacting on income levels, similarly there are concerns about the longer term impact on house prices and pension valuations. For those going through divorce or a separation, and trying to reach a resolution about their financial arrangements, this uncertainty can make things even more difficult.
When a couple separate, quite often there are financial implications that need to be considered. Reaching a financial resolution quite often requires some financial information, for example what income is available both now and longer term, what assets might be worth such as residential property valuations or pensions valuations. The Covid-19 outbreak has made this task all the more difficult.
The first step to reaching a financial resolution is exchanging accurate financial information between both parties to include their assets, pensions and income. In this time of uncertainty it may be difficult for accurate financial documentation and valuations to be provided, with pensions likely to be affected and for those who are self-employed it is particularly uncertain as to what their income maybe for the next 12 months.
Once financial information is obtained, the next step would be to consider how the available assets and income should be divided. For many couples, property and the family home quite often form a large part of their assets, but in the current situation property values may be affected and there may be a delay in properties actually being sold.
So what options do separating couples have?
- Continue to negotiate - you have the choice to consider financial options now, but it is important to bear in mind the current financial uncertainties and the longer term impact it may have economically. It would be important however to take independent legal advice before entering into a financial settlement negotiations or agreements to understand the potential implications.
- Put things on hold - Deferring negotiations until the pandemic is over and the economy is more stable could help both parties to more accurately value their assets, however legal advice must be taken before any agreement to defer negotiations is made as the consequences of doing so could be significant if, for example, there is a risk of one party becoming bankrupt.
- Continue to negotiate but factor in various scenarios - Another option would be for any agreement reached to allow for multiple scenarios, such as the value of a final lump sum being dependent on the sale of, and price achieved for, a particular asset. Maintenance could be varied depending on the incomes of both parties. It would be important to obtain independent legal advice to consider all of the possible implications of a financial resolution.
This is a difficult time for many people, and those going through a relationship breakdown will have many things that they need to consider. It is important to take expert legal advice at the earliest opportunity. To arrange your free initial 30 minute telephone consultation please contact Linda Hunter on 01928 736679 or Linda.Hunter@rowlinsons.co.uk