Financial Effect of COVID-19 on Family Law Property Settlements
In addition to the global economic impact of the COVID-19 pandemic, on a local level we are finding that many people involved in family law financial disputes are having to reconsider their position.
Valuation of assets for property settlements
One of the essential steps in negotiating any family law property settlement is to identify the total 'asset pool' in a relationship by collating the assets, liabilities, and financial resources of both parties.
The assets that quantify the ‘asset pool’ include motor vehicles, cash, real estate property, investments, shares, insurance, business interests and superannuation. In recent months, however, the value of many of these assets has been, and will likely continue to be, affected by COVID-19.
Unfortunately, there has been a great deal of volatility created by the pandemic across the globe. So far, assets such as shares in publicly listed companies have been impacted, with a flow-on effect to superannuation interests invested across shares and other various assets.
In addition, many businesses have been affected and (whether from government direction or other causes) have either temporarily or permanently closed or reduced their operations.
As a result, previous valuations placed on businesses for the purpose of a family law property settlement may be affected and will need to be reconsidered.
Bankruptcy and corporate insolvency issues
Due to the economic challenges of COVID-19, the number of individuals and companies facing potential insolvency has also increased. This is likely to raise significant and complex issues in a pending family law property settlement.
If you are currently a party to a family law property settlement and you, or your ex-partner, are at risk of insolvency you should obtain urgent legal advice. If negotiations are taking place and you have not yet finalised a property settlement, you should speak to a lawyer about reconsidering the value of certain assets affected by these recent events.
Now, more than ever, is a good time to consider settling your family law matter out of court through alternative dispute resolution methods, such as mediation and negotiation, under the guidance of an experienced professional. If you or someone you know wants more information, or needs help or advice, please contact our family law team at CDQ on ph: 02 8556 0130. We are here to help across all aspects of your family law matter.