Do I Need A Pandemic Clause In My Divorce Documents?

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Dickinson Wright PLLC

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Dickinson Wright is a general practice business law firm with more than 475 attorneys among more than 40 practice areas and 16 industry groups. With 19 offices across the U.S. and in Toronto, we offer clients exceptional quality and client service, value for fees, industry expertise and business acumen.
The Coronavirus has upended long-standing post marriage relationships for a number of people. Parenting plans have been rendered impossible by quarantine and other mandates...
United States Family and Matrimonial
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The Coronavirus has upended long-standing post marriage relationships for a number of people. Parenting plans have been rendered impossible by quarantine and other mandates; well-established financial security has given way to the largest number of unemployed Americans since the Great Depression; and the ability to pay for the home one rents or owns has become difficult, if not impossible, for many.

Lawyers everywhere are scrambling to address numerous, complex and candidly oftentimes unanticipated, problems that have emerged from the unprecedented pandemic and its effects on the economy, health and jobs. Is now the time to take a look at divorce documents that are currently being negotiated, or which may later be negotiated, and try to address some of these problems?

Many businesses purchase insurance or put clauses in their contracts that address a legal occurrence called a "force majeure." A Force majeure clause, which some are now calling Pandemic Clauses, allow parties to either be excused from performance or suspend the time of performance, in whole or in part, due to events or conditions that are out of their control. Usually the events are of unanticipated catastrophic occurrences that are not foreseeable.

How then to protect against unforeseen circumstances that may put the ability to make spousal payments, child support payments, or other payments post-divorce impossible? One option could be a Pandemic Clause in the divorce documents, in states where they are allowed. Such a clause, if approved by court, could allow a person to later reduce their financial obligations in certain circumstances, and for this reduction to occur automatically.

For example, a Pandemic Clause could state that, under certain conditions, the requirement to pay alimony and/or child support could be reduced, or even suspended. A decrease might be directly related to any decrease in a party's gross income, i.e., a 20% reduction in payment if there is a 20% decrease in salary due to the unforeseen circumstances.

If such a clause were included in the divorce decree, the paying party's obligation could be automatically reduced at the time of such an event. It would be important to also include a provision in the decree that the court retains jurisdiction to change the financial obligation based on the facts in the particular case. But once a triggering event were to occur, and the conditions were to be met, the paying party might automatically be able to reduce their future financial obligations based upon an agreed-upon formula in the present.

There are many unanswered questions regarding Pandemic Clauses. Questions to consider with them include how might such a clause potentially affect performance obligations on the other side, including parenting time. If one parent is quarantined, might such a clause automatically stop the other parent's obligation to allow the child to be with that parent? State, regional and even local law mandates may provide assistance or a solution to this quandary.

Other areas of inquiry may include the following: if a Pandemic Clause automatically reduces support obligations, how long would this change last and how would the prior obligation resume? If there were to be such a reduction, might there be an obligation to later "make up" for the reduction in payments due to the Pandemic Clause temporary payment reduction requirement? By whom and how would the Pandemic Clause changes be monitored and controlled? What happens if the recipient's pay is also reduced and how would the "double whammy" effect on that parent be accounted for?

Talk to your lawyer about how a Pandemic Clause might be appropriate in your case.

Originally published 10 July, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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