Property Division During the COVID-19 Pandemic

The COVID-19 pandemic has majorly impacted the state of our world economy. A question that comes of this is how the COVID-19 will affect property division in pending and future divorces. California is a community property state. Therefore, it is the basic presumption that property acquired during the marriage is community property. Upon divorce, the value of the property is presumed to be split 50/50 between spouses. While California adopts a rather straightforward model, the COVID-19 pandemic can hinder the property division process. As California is undergoing a second lockdown, access to courts is limited. However, the delays have given attorneys more time to discuss how to value assets during these uncertain times. 

Property Valuations 

Recently, the Marital Property Committee hosted a brown-bag lunch event to discuss the impact of property valuations. The Committee recognizes that states abide by different rules for various types of assets. It is without a doubt that more litigation on valuations issues will occur. The court may consider whether valuation dates should shift, the negative financial impact on the valuation of assets, and what independent factors should be taken into consideration in the valuation of assets.  

Property Division

 A fundamental stage in property division includes determining the fair market value (FMV) of each asset that is subject to division. The court will determine what a fully informed buyer would likely pay a fully informed seller for the asset in question if neither part is required to close the deal. Each spouse will hire experts, such as forensic accountants, brokers, and property appraisers, and other forensic experts to support their respective position. The court will likely value the asset based on the expert testimony that will be found the most credible. The economic uncertainty caused by the pandemic may drastically change an asset’s worth. This uncertainty creates new challenges for judges as the outcome of property division becomes nearly unpredictable. 


To alleviate this uncertainty, spouses should consider consulting a mediator who can help reach an agreement. A divorce mediator is a neutral third party who specializes in resolving complex and contested divorce issues. The agreement between the spouses can help prevent assets from being diminished during litigation, an aspect of divorce that both spouses certainly want to avoid.