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COVID-19 & Discount Divorces: Are Unhappy Rich People Hedging their Bets?

Written by Russell Alexander / (905) 655-6335

COVID-19 & Discount Divorces: Are Unhappy Rich People Hedging their Bets? 

We have recently reported on the surge of divorces stemming from COVID-19. We reported how the COVID-19 stress mirrors that of similar times in the year where divorces typically peak. Specifically, Christmas and after summer vacation due to the increased time together and financial burdens. However, COVID-19 has added a different unique factor that has resulted in an influx in divorce applications; a dip in asset value.

With the markets sudden decline and the worldwide economy in essence coming to a halt over the course of this pandemic, many people have seen their assets dip in value. This has urged some of the more wealthy individuals whose assets are more prone to market fluctuation to utilize this time to separate from their spouse. Some papers have reported that this could transpire to many high profile cases in the upcoming months.

In Canada, married couples often share the worth of their assets acquired from the date of marriage to the date of separation. The spouse that retains more assets or income throughout the marriage is obliged to give the other spouse half as an equalization payment. Therefore if assets declined during the course of a pandemic that shocks the economy, the equalization payment would also decline unless the asset is jointly owned.

The increased stress from quarantine and financial uncertainty will remain the primary motivator for couple’s to consider separation, however these reports indicate that the market decline has proved opportunistic to those that may have been considering divorce for a while.

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About the author

Russell Alexander

Russell Alexander is the Founder & Senior Partner of Russell Alexander Collaborative Family Lawyers.