COVID-19 brings with it a lot of anxiety and uncertainty. In addition, the nature of the pandemic has changed the way that separation or divorce can be handled. Some may ask questions akin to the following:
- How can I meet with a lawyer for when I’m social distancing and offices are closed?
- Can I still create and implement my separation agreement?
- Should I delay my separation agreement until the effects of COVID-19 stabilize?
As we’ve mentioned in a previous post, we have chosen to operate our Firm remotely. We are prepared to service your needs in a manner that is safest for you and our staff. Therefore, we have elected to communicate to our clients via telephone, email, and video conference. As a result, we are able to prepare and negotiate separation agreements remotely during the coronavirus pandemic.
To summarize, the answers to the first two questions above are: we offer our services remotely and yes, respectively.
Key Considerations
It’s no secret that the coronavirus pandemic is heavily impacting every aspect of our lives in unprecedented ways. Below, you’ll find some information regarding how COVID-19 affects the economy and ultimately your separation agreement. It may shed light towards answering the third question stated above.
Examples of Potential Risks
Investments. Assets are generally valued at the date the agreement is made, not the date of your separation. Thus, with the volatility that the market is currently facing, the value of your divided assets may increase or decrease. When dividing your assets during separation, you may then be forced to sell your investments at a fraction of their purchase price.
When seeking legal and financial advice, you can mitigate these risks. For example, a lawyer can help you draft an agreement that has terms specifying that assets be sold in the future when the market stabilizes. In this case, holding on to the investment may be a smarter choice. Another option you may be given is to divide your investments in specie. This term means to simply deliver the investment in its current form as opposed to its monetary equivalent. Therefore, the partner may be able to hold on to them until the market stabilizes prior to cashing them out.
- Real Estate. There will likely be an oversupply of housing and a decrease in demand to buy. As a result, property values will drop and again, you run the risk of selling at a low price.
- RRSPs. They, too, are very likely to be worth significantly less if you were to cash them out during the COVID-19 pandemic.
