How COVID-19 Affects Divorce Financials – Alimony & Equitable Distribution

Lately, we are fielding many questions and concerns regarding the impact of coronavirus on divorced and separated parties. This blog will address the impact of this national crisis on alimony and equitable distribution.

To learn about the impact of this crisis on child and spousal support, please read my recent blog “How COVID-19 Affects Divorce Financials – Child & Spousal Support. If you have questions about the effect of the virus on custody issues, please read my partner Drew Taylor’s blog “COVID-19 And Custody: When Parents Can’t Agree.


Alimony is support paid by one spouse to the other after the divorce is final. Alimony may be negotiated and memorialized in a Property Settlement Agreement, or awarded by the court after trial on equitable distribution.

Alimony may be modifiable or non-modifiable. In many cases, parties actually prefer the guarantee of having a non-modifiable payment amount.  However, in a crisis situation, this may present a challenge. Is a deal a deal in cases like this? What if the payor is out of a job and can’t pay? Should an exception be made? The person receiving alimony would argue that they need the money to survive.

In some cases, alimony is negotiated to be received instead of other equitable distribution assets. Is it fair for the recipient of alimony payments not to get what they bargained for? Is it fair that the party paying the alimony is still obligated to pay it even if he or she loses their job? The answers to these questions may depend on a variety of factors and require advice of counsel.


With regard to equitable distribution or the division of assets, that poses other challenges. If a case is not yet resolved (either by agreement or trial), present value of assets must be considered. The division of marital assets now may look different than it would have looked two months ago because the value of many assets has decreased substantially. It may not be a good idea to negotiate an agreement right now if the marital estate contains investments in the market.  In those cases, it might be a good idea to wait and see if the market rebounds. Every case must be considered individually. The reality is the values are what they are, but earning ability may play a more substantial role than it did previously in the weighing of the equitable distribution factors and more cases may receive a division that is unequal, weighted in favor of the lesser earning spouse because the greater earning spouse will be able to rebuild faster.

The more difficult issue to address is the situation where an agreement that has been signed or a court order has been entered.  In those cases, a deal has been made, and now the asset values have plummeted. Does the person receiving what they bargained for still get that same amount of money?

By way of example, suppose the parties had a written agreement that one spouse would receive $500,000 from the other’s 401K and the agreement does NOT specify that they share in gains and losses. Should that person still get the $500,000 without considering the substantial losses that may have occurred post agreement but pre-drafting of the qualified domestic relations order?

If the agreement DOES specify the spouse participates in gains and losses, is it fair if the overall agreement was based on other assets in addition to just retirement?

Often times gains and losses on retirement assets are negotiated after careful consideration of other assets and other agreements made.

Many challenging issues have arisen as a result of this pandemic. We are in an unprecedented situation and the challenges are great. That is why we want you to know that we are working remotely and are available to you. We will continue to answer your questions, advocate for you, and navigate through this time together. Please don’t hesitate to call us.

The divorce and family law attorneys of Shemtob Draganosky Taylor Stein, PC can guide you through all of your divorce and family law matters including alimony and equitable distribution issues. Contact our family lawyers for a confidential discussion.