Take Control Blog
The Cost of Divorce and Who Pays?
As sad as it may sound, one of the first questions most people ask themselves when considering a divorce is not why or when — or even who. It’s how.
As in “How much is this going to cost me?”
Anyone who has been through a divorce can tell you that the pain and grief associated with the death of the marriage can soon make way for the stress and anxiety associated with the potential or real loss of financial stability.
There are not just legal fees to consider, but the splitting of assets, the cost of additional housing and joint financial obligations that must be met even if there are no children involved, in which then there is the additional costs of child support and college plans to add to the formula.
Legal costs, however, are usually the most intimidating. Both spouses normally pay their own attorney’s fees and split court costs. In some cases, particularly when one spouse is the only breadwinner and the other would suffer a financial burden, a court may order that one party pay the legal costs of both.
And those costs can add up fast.
Make no mistake about it: divorce is big business. The number of divorce attorneys has more than doubled since 1960 to keep up with the rising pace. Billboards and bus bench signs selling “quick and easy” divorces for $299 advertise the rock bottom price for easy settlements with no children and no property where both parties have basically already agreed to terms. J ust because the “first consultation is free” doesn’t mean you’re at a discount divorce store. A more realistic final bill for adversarial divorces is between $10,000 and $30,000 – or anywhere between $150 and $1,000 an hour.
The more that you and your spouse can agree upon away from the law office or the courthouse, the less money you will spend on those hourly fees. So if you can talk about it without killing each other, discuss the terms of the agreement as much as possible off the attorney’s clock. If your divorce is nasty and you need to fight on every little last detail, the register will keep ringing “kaching” with each negotiation.
Custody battles can drive the price of divorce up, not only because the lawyers keep battling each other at your hourly expense, but also because of other related fees. You may have to undergo psychiatric evaluations or have your children see a court-ordered psychologist. A judge may appoint a Guardian Ad Litem. There may be sworn testimony with a court stenographer taking notes. Your attorney may want to call upon expert witnesses at trial. Ka-ching. Ka-ching. Ka-ching. All of these things will likely come with separate price tags.
Similarly, more expenses are incurred when more marital property or joint debts have been accumulated during the marriage. You may need to hire a real estate appraiser, an insurance consultant or a divorce financial planner to help you navigate these complex matters. Each of these professionals are paid separately.
“A lot of people do not realize the costs associated with a divorce, not just during the process but afterwards,” says financial planner Phillip Shechter, a veteran CPA who is a member of the MOD Squad. “But by engaging a financial advisor experienced in divorce matters, you can protect the investments you made in your marriage and ensure your future financial health.”
So, how much is this going to cost you?
That depends entirely on how you and your spouse decide to handle matters. The more you can work together to settle marital issues and reach a compromise that both of you can live with, the more money, time and frustration you save.