Business Value Decreases, Divorces and Covid-19

Businesses, Divorce Assets and COVID-19

It is no surprise that the COVID-19 pandemic has affected most businesses in a negative way.

Essentially there are three areas of asset classes impacted by the pandemic. 1. Business valuations, 2. Real estate holdings, and 3. Investment portfolios. Some of the impacts were bad and some were good.

Business valuations. During these pandemic times there were three ways to value a business from our experience in divorce cases. One, you can value the business before the distress or catastrophic loss. Two, you can look at the effect on a business for the period of six months to a year. Three, you can develop a value estimate by looking at the potential effects that the pandemic is going to have on the business. Obviously, whatever is done is going to affect the cash flow from the business and will affect the owner’s ability to pay child support and/or spousal support. In some cases, the business’ income and value have increased, this does not only happen during COVID, but can happen during any type of catastrophe where a business will have more opportunities to profit from their business.

Real Estate is popular right now. It is a seller’s market. Interest rates are low and inventory is low. Property is holding its value or appreciating. However, if a person lives in an area where property value is dropping, this is a major concern in terms of distributing the assets in a divorce. The divorcing couple may hold on to the property until the market in their area recovers that way the parties can maintain their equity in the property. Another strategy is to rent the property out or allow one spouse to live in the home post-divorce. Right now appraisals are high and people are equally concerned they are overbuying to keep their homes.

In Michigan, the Governor issued a stay on evictions early on in the pandemic. This can be problematic if a spouse in a divorce case owns a multi-residential property as rental income may be relied upon to make the mortgage payment of the property. If the spouse can hold onto the property because they have the means, it is highly suggested until the property can be sold.

Investment portfolios were very uncertain in 2020, since then things have somewhat stabilized. Given the state of the global pandemic and high unemployment rates it is interesting that the markets are doing well. The market seems to continue to do well. This allows us in many cases to offset investments against other assets a party might want to keep, like the home.

Many individuals are being faced with the fact that because of the pandemic they cannot afford to pay their court ordered support. We are seeing a lot of post-judgment modifications and support orders with percentage on overtime or bonus money. Percentages means we start with a low base support and then as money starts to get made over and above that base the increase is self-executing. This is not a new thing but it is something we are seeing more of now. This saves time and money from being in and out of court and paying attorneys to draft the continuing support orders as money starts to flow and people’s accounts start to grow once again. We have had to find more creative ways to get support for a client. Reduced cash flow impacts the ability to pay support.

The attorneys at Kathryn Wayne-Spindler & Associates are experienced attorneys who change with the times to meet the needs of their clients.  Contact the Milford, Michigan law office of Kathryn Wayne-Spindler & Associates at 248-676-1000 for assistance. The attorneys of Kathryn Wayne-Spindler & Associates practice law throughout Southeastern Michigan including Oakland, Wayne, WashtenawGenesee and Livingston counties. The attorneys handle cases in Milford; Highland; Hartland; White LakeWixom; Commerce; Walled Lake; Waterford; West Bloomfield; Linden; Fenton; Flint; Grand Blanc; Holly; South Lyon; New Hudson; Howell; Clare; Gladwin; Houghton Lake; Higgins Lake; and many more Michigan communities.

For more information on this topic please see Family Lawyer Magazine Winter 2021 or


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