How Much Will Divorce Cost Me?

How Much Will Divorce Cost Me?

An overview of four key ways to get divorced and the costs involved

Divorce costs in the United States vary, but one expert estimates a cost range for divorce between $10,000 and $20,000, with an average of $15,000.

Sadly, most couples fail to budget for a divorce like they would for a wedding or funeral. They fail to do sufficient research, and their expectations about the cost of divorce are based on hearsay and generalities. In fact, costs can be managed by clients to a large degree, but not totally so.

When someone says, "I want the least costly divorce possible", what do they mean and really want? Too frequently, the old adage "you get what you pay for" is not only true, but dangerous. Aiming to find the cheapest divorce possible should not be the prime motivating factor for anyone in a contested divorce.

The risks of cutting a deal on the "cheap" may have not only short-term risks, but long-term financial consequences that cannot ever be "undone". Property division is a one shot deal for the rest of your life.

The "what ifs" are both the most painful and avoidable elements in divorce, and everyone should face them head on. While you can research some of these "what ifs" yourself, I strongly suggest embracing the opportunity to work with a divorce financial planner. This is the expert you want and need during divorce to make strategic recommendations in a cost-efficient manner in any legal setting.

Here are the four main ways to get a divorce, in order of their general costs:

DIY or Pro Se. The least expensive divorce is the do-it-yourself or pro se. This means both parties literally negotiate, settle, and arrange for their own divorce. As can be imagined, this works best for short-term marriages with no children, few complications, little assets, and at best, in uncontested situations.

Mediation. The next least expensive method is mediation. A mediator is a neutral party whose hourly fees and business models vary greatly. The mediation process is defined at the outset and costs are identified. Mediators rely upon the couple to produce almost all of the information and financial discovery, and come up with issues of concern. A mediator facilitates the couple in reaching a settlement that best suits both of their needs/desires. Many states require that both parties hire outside review counsel to ensure they have not forfeited their rights unknowingly and to ensure the process is unbiased.

Collaborative Divorce. Next is collaborative divorce, where there may be two attorneys, two coaches, one financial specialist, and a child specialist. Collaborative divorce does not promote itself as a low cost process, but instead as a more holistic approach. It is a team dedicated to guiding clients to reach an amicable settlement with both parties' interests met to the fullest extent possible. It emphasizes family relationships being intact post-divorce. Each divorce professional charges his/her own hourly rates and may require individual retainers. However, there are no court fees for serving motions or discovery demands; only at the very end do the attorneys file their appearance in court. If for any reason, the couple fails in this process, the entire team is disallowed from representing either spouse, and divorce process starts all over again at full cost to the couple.

Litigated. The most traditional and costly divorce is litigated. Each spouse hires his/her own attorney who advocates for them, files court motions, court appearances, papers, and hires other experts. There are court fees, marshal fees, filing fees, etc. Litigating attorneys may be reasonable or outrageous in terms of billable hours. It is what the market bears. Litigating attorneys may work well with the opposing attorney to reach an expeditious settlement or they may choose to "milk" the case for fees. If the case goes to trial, costs become prohibitive.

However, the choice of legal representation is only part of the cost of divorce. Divorce costs are shaped equally by these powerful factors:

1. The clients' own behaviors, specifically their lack of financial knowledge.

2. The nature and financial complexity of the case itself.

3. The necessity of having experts involved to value a business, licenses, earning capacity, assets, projections for future lifestyle needs.

4. Legal professionals may fire their own clients. Clients bear the costs of hiring and restarting the process anew.

5. Court scheduling, availability of all parties, time for producing information, etc. contribute to the duration and cost of divorce.

This is why the expertise of divorce financial planners is essential during divorce: To help budget for this process; source funds to pay for divorce; educate clients and professionals about complex financial issues; analyze choices with greater expertise and less expensively than lawyers; produce precise analysis for desired outcomes; and provide counseling to clients post divorce. This is what you get when you pay for it!

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