Coronavirus Consequences: The New Status Quo
The new normal is about to become radically different. Depending on how long this pandemic continues, married couples contemplating divorce are about to create a new status quo. In contested divorces, the reality is that at least one party, if not both, will try to take advantage of any situation or circumstance in order to advance his or her case and position.
What most divorcing couples don’t realize is that how they lived during the marriage affects and defines how they will live during and after their divorce. I hear a lot of frustration from clients on this point: working spouses complain that the stay-at-home spouse can and should work and that both parents should have equal custody. Normally, my answer to this is that, while someone can work, or while the kids could be with both parents, the Courts tend to make orders consistent with the status quo during the marriage (at least initially). Translation: they will keep things as they are and have been, as established by the existing facts of the case. Fortunately, these “status quo” orders are not forever; but for anyone going through a divorce, it will feel like a very long time.
So, how can we expect the Coronavirus pandemic to affect divorce once we are back to “normal”? Well, while this time is completely unpredictable, there are some factors that may impact how your divorce will pan out.
First, has there been any permanent consequence from the pandemic?
Are one or both of you now permanently working from home? Was one of you laid off and not back to work yet? Has there been a reduction in income that was supposed to be temporary, but is now permanent? It’s not so much the temporary changes that are concerning. If a change during the pandemic is temporary, that means life will (at some point) go back to normal. You will be back at your job from nine to five, you’ll get your regular paycheck, and life at home will fall back into the regular, pre-pandemic routine. When it comes to your case, it’s the permanent changes that raise flags.
Second, what are the effects of this change?
Consider the following example: A married couple equally shares responsibilities in the household (both work and spend an equal amount of time with the children). As state working mandates evolve, one working parent, a doctor, is deemed an “essential employee” and must continue to work outside the home. The other parent, a “non-essential employee” is required to work from home, and become, at least temporarily, the stay-at-home parent taking care of the kids. When the divorce is filed, this is the status quo and the parent who stays home may claim that he or she is the one who should have custody.
In this example, it’s clear that there was a change in circumstances and that change led one party to gain an advantage over the other, at least in terms of custody.
The opposite would happen in a situation where only one parent was working outside the home and the other was a stay-at-home parent. If the working parent stays home, now both parents will be home with the kids, thereby “leveling the playing field.” The non-working parent might attempt to gain sole custody on the basis that he or she is the more available parent or has been primary caretaker of the children. However, this isn’t such an easy case to make where both parents have been home, equally sharing parenting responsibilities, for several months.
Contrast that with two working, “essential” employee parents. Both parents would keep their regular work schedule (maybe work even more) and there would be little to no change in circumstances regarding custody. Every case is different.
There are financial repercussions as well. Given the number of layoffs, salary reductions, and other financial losses, support and property distribution issues will also be significantly impacted. The “breadwinner” of the family with historically high earnings may soon find those earnings drastically reduced, and his or her support obligations will reflect that reduction where that reduced income is the result of these drastic financial times.
As far as property distribution, businesses negatively affected by this pandemic will show a decreased value. From a divorce asset valuation perspective, this could be good for the business owner who would potentially have to give his or her spouse a buy-out amount of that business. By contrast, there are some businesses that have increased their work and profit as a result of this pandemic. The issue in both these scenarios will be to determine if the increase or decrease is only temporary or likely to continue in the future. This could result in an inaccurately high or low valuation.
Third, what now?
There is never a right or perfect time to get a divorce. The reality is that when a relationship is broken, the end date is rarely planned, and, often times, the party taking the first step leaves the other no choice. That being said, the best offense or defense is to be prepared, be aware, and keep these things in perspective when making decisions about day-to-day living.