Even if the country, if not the world, appears to be in stasis, life goes on as before at a granular level; babies are born, birthdays are celebrated and couples split up.
As many of us know from personal experience, the pandemic has cut across many activities – people have had to amend or shelve major life plans, such as getting married, and conversely, getting divorced.
Is there any reason though not to examine and apportion assets in a divorce settlement while we’re in lockdown and businesses are effectively mothballed?
Roger Isaacs, Forensic Partner at Milsted Langdon explains that most people would prefer not to be left in limbo and want to finalise their financial separation and, if the assets include a business, want to know how much it is worth.
Of course, views differ on getting a valuation depending on who owns the asset.
For example, if the business is owned by a spouse who wants to pay out as small a sum as possible, he or she will be keen to value it now, while it appears to be worth very little.
Others would prefer to delay and wait until things get ‘back to normal’ but that could take years, which presumably wouldn’t suit either party if they want to move on with their lives.
To assess the situation fairly, the first thing a divorcing couple with a family business at stake should do is appoint a forensic accountant, who can give a professional and independent view on whether it is going to be possible to arrive at a meaningful valuation.
It should be fairly straightforward to value a business from how it stood before the pandemic began, which is where a forensic accountant is likely to start. They must then consider how it may fare if it has been ‘mothballed’ due to the current crisis and what its prospects for recovery are post-lockdown.
While delaying an assessment of value may seem like a good idea to some parties, it brings huge uncertainty and may unfairly drag out an already acrimonious process.
Roger said: “With divorce rates likely to spike as a result of the requirements to ‘stay at home’ and the financial impact of the pandemic, it is important that separating parties seek help to value assets that may form part of a financial settlement after a divorce or dissolution of a civil partnership.
“If anyone is thinking of valuing their business to finalise a financial settlement, they should get in touch with us.”