With a challenging financial landscape for the UK understanding and re-evaluating the financial aspects of your divorce and maintenance payments is fundamental.
Coronavirus has had a major, but hopefully temporary impact on the housing and stock markets. Social distancing restrictions have prompted calls to house buyers and sellers to delay moving. Banks are pressing for a full suspension of the UK housing market and lenders are concerned about the effect of the pandemic on valuations causing changes in lending criteria.
Stock markets around the world are reeling from the economic impact of social distancing measures, business shutdowns and government bailouts. It is too soon to tell what the longer term impact of the situation will be on either the housing market or the stock market.
Despite the scale of state assistance, initial indications are that incomes and job security will be affected in the short to medium term, particularly for the self-employed and those in the leisure sector.
For parties involved in financial remedy and divorce, these are very uncertain times. So what is the impact on the advice on how to proceed?
If you have provided a financial disclosure or are involved in court proceedings or detailed negotiations, you should look again at the assumptions made about the value of property and stock market based investments including defined contribution pensions and self-invested pension policies.
Valuations of property obtained prior to the crisis should be revisited when the market has calmed and the full impact is clear. Stock market based schemes should be revalued, taking into account the recent falls in the share index.
If the assets in dispute are cash based or defined benefit pension schemes such as public sector and large final salary schemes, it is generally safe to proceed because these assets are largely unaffected by the ongoing crisis.
Offers to settle based on pre-pandemic markets
For those who have made offers to settle based on pre-pandemic markets, urgent reviews should be carried out to avoid settlement based on incorrect assumptions. On the other hand, an offer received prior to this crisis, which appeared unfavourable then, may look more attractive now.
Interim and long term maintenance arrangements
Interim and longer term maintenance arrangements are likely to be reviewed due to concerns about inability to pay, possibly leading to applications to vary.
For those with child-support assessments, there is a requirement to report a fundamental change of circumstances such as loss of employment. It should also be borne in mind that an annual review is triggered where income in one tax year is 25% greater or lesser than the previous year. 2020/21is likely to be a year of downward variations for many.
What if your case is already scheduled for a hearing?
For cases already in the court timetable, the restrictions mean that hearings may be delayed or take place remotely via telephone or video conferencing. There will inevitably be some delays but this is likely to end with the social distancing restrictions into three months time.
We take a very pro-active approach to these matters. We are carrying out daily reviews of our clients’ situations on a case by case basis as this situation unfolds. We will continue to do so until the restrictions end and the full impact has become apparent.
David Cobern is a director and solicitor who specialises in family law. If you would like to discuss this article any other family law legal matter then please do get in touch by telephone 01392 421777 or by email [email protected]