How to Approach a Divorce During a Recession
For years now, economic experts have been warning Americans that a recession is just around the corner. While it might seem like this recession will never actually arrive, it always makes sense to create an effective plan for the future if things should go badly. This is especially true for divorcing spouses, as these individuals may experience particularly serious economic pressures as they end their marriages. Fortunately, there are many things that you can do in order to approach your divorce effectively during a recession.Work With a Financial Professional
Ultimately, it might make sense to get advice from a financial professional as you head toward divorce during a recession. Examples include accountants, forensic accountants, financial advisors, and so on. In addition, some divorce lawyers are more knowledgeable than others about financial matters. Some divorce attorneys in North Carolina have specific experience with complex assets, investments, and high-net-worth divorces. Choosing the right team for your divorce is essential if you want to minimize the effects of a divorce, especially during a recession.Handling Assets in a Recession
Assets held in a marital estate are perhaps the most affected by a divorce during a recession. This is because there are high levels of volatility across various asset classes during a recession. One of the most important steps in the equitable distribution process is valuing these assets. If the assets are dropping in value with each passing week, it can be very challenging to figure out their “true” worth. This volatility might affect the stock market, the real estate market, bond markets, treasuries, and so on. Even the value of a family business may be unclear during a recession, as its long-term survival may be in question.
When facing this level of uncertainty, it makes sense to consider your full range of options when handling assets. Spouses may mutually agree to sell off assets during a recession to minimize losses. They may also choose to hold assets in the hopes of a price recovery. Another option might be to trade certain assets, although it is imperative that both spouses exit the marriage with equal exposure to high-risk assets.
Of particular note is the family home. Despite a potential fall in the real estate market, a family home has much more utility compared to stocks, crypto, and other investments. After all, you cannot shelter yourself from the cold with an ETF or a digital currency. Therefore, spouses may wish to prioritize this asset during negotiations. Spouses should avoid walking away with only the most high-risk, highly volatile assets in a marital estate.How to Lower Divorce Costs
It also makes sense to lower your divorce costs as much as possible during a recession. You can do this by avoiding litigation and opting for collaborative law or mediation. With this approach, spouses can resolve their divorces relatively quickly behind closed doors. Fewer legal fees and a shorter turnaround time make this strategy less stressful, and spouses also enjoy more control over how their assets are handled. During litigation, a judge might order spouses to liquidate assets at a very bad time in the market. They may do this simply because it is the most convenient option for the court.The Separation Period Provides Time to Organize Your Finances
Spouses in North Carolina should also take full advantage of the mandatory, one-year waiting period associated with divorce. Although many spouses are less than enthusiastic about this 12-month “cooling off period,” it might actually be advantageous during a recession. During this period, spouses can wait for the market to recover and get their finances organized.
Initiating separation as quickly as possible may also be a smart move, as your separation date affects which property is considered “separate.” A shrewd spouse may separate from their spouse and immediately begin shifting their portfolio toward more defensive investments during a recession. After one year has passed, they may then approach the legal process of their divorce in a much more secure manner.Where Can I Find an Experienced Divorce Attorney in North Carolina?
If you have been searching for a qualified divorce attorney in North Carolina, look no further than Arnold & Smith, PLLC. Over the years, we have helped numerous spouses in the Tar Heel State protect their assets and strive for the best possible financial outcomes during divorce. We know that a recession can add additional pressures to divorcing spouses, but there are many strategies that can make this process easier and less financially problematic, even during the worst recessions. Book your consultation today to get started with an effective action plan.