Perhaps Your Biggest Asset Following Divorce: The Bank Account of Emotional Capital

Alan R. Feigenbaum

A necessary part of every divorce action is financial disclosure in the form of a “Statement of Net Worth,” in which a client details their assets, liabilities, and monthly expenses. When clients send the form back, we attorneys are laser-focused on whether each and every asset and liability has been disclosed: bank accounts, business interests, real estate, whole life insurance, loans, mortgages, etc.

What you will not find on any Statement of Net Worth is what I have come to call the Bank Account of Emotional Capital. I’m sure you’re wondering how we go about defining this mysterious, intangible asset. Very simply: what you have in this invisible but quite essential account represents your ability to transition to the next chapter of life—after divorce.

Each divorce case is unique. Everyone’s familial circumstances are unique. There will always be divorce cases that do not lend themselves to a resolution prior to trial. That said, in many divorce cases, the time will come when the attorney can see an “Exit” door for their client, meaning a path to resolving the dispute, well before trial is on the horizon. When that happens, the opportunity to make a sizeable deposit to a client’s Bank Account of Emotional Capital is there for the taking. Continue reading

Amid the Pandemic: Families Coming Together … and Coming Apart

Marilyn B. Chinitz

In times of crisis, families typically come together. People decide to avoid unnecessary battles. Arguments are fewer. But that is not the case for unhappy and divorcing couples, many of whom now are experiencing extraordinarily challenging times. Family tensions are exacerbated as COVID-19 continues to impact lives in previously unimaginable ways. Some form of social distancing, working from home, limited mobility, and caring for children full-time without traditional support systems, are all now the norm and will be for the foreseeable future.

Concerns for Our Children.

Children of all ages are experiencing tremendous anxiety from the significant changes in their daily lives—the isolation, the new cleaning/sanitizing routines, and fears created by the pandemic. Limited access to parks, playgrounds, and friends coupled with distance learning, media consumption, and time-filling crafts and games can be sustained for a few weeks, but not for months on end. In divorced or separated families, many children are not spending time with their non-custodial parent because it would present too much of a risk for contracting the virus. Children are understandably confused, upset, depressed, and unfamiliar with how to process their feelings.

Parents’ Challenges.

Parents are juggling and multitasking like never before. They are expected to work from home while at the same time providing full-time care for their children, cooking, cleaning, shopping, and supervising online studies and extracurricular lessons. Some parents are doing this alone, without help from anyone—no tutor, spouse, or domestic helper. Simply put: parents are stressed and overwhelmed. They, too, are socially isolated and cannot depend on their normal diversions. Activities they once took for granted—dinner with friends, in-person meetings with a therapist, workouts in the gym, or myriad other traditional methods of dealing with stress—are now out of reach. Additionally, isolation presents parents with some of the unhealthiest of options for dealing with stress: binge eating and alcohol consumption. Moreover, many non-custodial parents find themselves in the untenable position of missing their children as a result of the coronavirus prohibiting travel and visits.

Divorcing Couples.

Those in the middle of divorce litigation are in uncharted waters. Their dispute resolution forum is not available to them. The courts are, for the most part, closed or only hearing cases involving an emergency, such as danger to a child. While some judges are conducting conference calls/Zoom sessions with attorneys, the fact of the matter is that the family courts are not available and will not be for the near future.

One of the most concerning aspects in all of this is the decrease in the value of marital assets—in some instances having decreased by as much as 50‒70 percent. Ongoing negotiations about the division of assets will need to be re-examined. Updated appraisals will be required, including revised business valuations and/or re-calculations of the transfer amounts from one spouse to the other.

And it does not stop there. Historic levels of unemployment, now a reality, are impacting the ability to pay support for the benefit of the children as well as spouses. Unexpected unemployment or the shuttering of businesses are examples of substantial changes in circumstances that will likely prompt countless applications to the court for downward modification of support obligations.

Considering Divorce.

If a marriage was falling apart and on the edge before this pandemic hit home, undoubtedly things will get worse with spouses together in a “lockdown” situation. We could be hopeful that cooler, wiser heads will prevail and that couples having problems can put their emotions and fears aside and either present a united front against these very challenging times or work out their custody and financial issues amicably. But this is unlikely to be the case. Although new divorce proceedings are generally not being instituted because the courts are focusing on emergency issues in the cases already proceeding, people are still at war with one another. Even in jurisdictions where filings are being accepted, do not expect to get any relief from the court soon. We are receiving multiple calls from prospective clients who want to understand what the next best steps are to terminate their marriage and divide assets during an unpredictable, unsettling economy.

Moving Ahead.

Many lawyers are now working with their colleagues to negotiate settlements and resolve issues in the interest of moving cases along, even though the courts are not available. More than ever before, it is incumbent upon the attorneys to assert leadership—and to step in since the judges cannot—to try to work with their adversaries to take a position that is fair and reasonable to both sides and build consensus. Otherwise, everybody loses.

For more on this important topic, please join Marilyn for her May 27, 2020, webinar:

Lunch & Learn: Successfully Navigating Divorce and Separation Amid COVID-19