Divorce Costs
The average cost of a divorce today is widely estimated at $20,000, though in some cases it can cost as little as a few hundred dollars or as much as hundreds of thousands, if not millions, of dollars. The cost of your divorce will depend on the difficulty of the case, the skill of your attorney and whether you and your soon-to-be ex-spouse see eye to eye.
If you cannot agree about whether to divorce and/or cannot agree on the terms of the divorce, the court will decide for you. Fortunately, most couples are ultimately able to resolve the key issues, including alimony (spousal support), child custody and support, division of marital assets, and allocation of debts, with the advice and support of skilled legal counsel.
Whether your divorce ends peacefully or in full-scale litigation, it is important to have a qualified divorce lawyer on your side to guide you through the process and make sure your rights are protected.
Contested Divorce Litigation
A divorce is contested if the parties disagree on one or more of the basic issues. The more financially and emotionally complex the situation, the greater the likelihood the divorce will be contested. Some of the issues that commonly contribute to contested divorces include:
- The house (e.g., who keeps it?)
- Family business
- Concealed assets and debts
- Valuation of assets and debts
- Division of personal property and real estate
- Support and custody of children
- Retirement assets
- Trust funds
- Accusations of abuse
Some of the key steps in a contested divorce include:
- Temporary Orders. The judge may issue temporary orders (while the divorce is pending) concerning spousal support, child support and custody arrangements, occupancy of the marital home and other immediate concerns.
- Discovery. The attorneys will gather information (e.g., request records such as bank statements, property deeds, business records, credit card bills) relating to financial, custody, and visitation issues.
- Alternative Dispute Resolution. In many states, couples are required to participate in alternative dispute resolution such as mediation (see below) as part of the divorce process.
- Trial. If the parties cannot come to an agreement outside of court by the time of trial, the court will decide for them.
With the help of an experienced divorce lawyer, the majority of couples are able to reach a divorce settlement out of court and avoid the risk and expense of a full-blown trial.
Attorney fees for contested divorces are usually billed at an hourly rate and often require a retainer fee at the outset of the case. The average cost of a contested divorce is estimated to be $27,000. However, parties that wind up in trial typically face increased attorney fees, service fees, deposition costs, witness costs, and other trial expenses. Less than 5 percent of divorces are fully litigated, and with good reason the average cost of a fully-litigated divorce is $78,000.
Mediation
Allowing emotions surrounding the divorce (e.g., anger, resentment, rage, grief, etc.) to drive litigation can be costly. Mediation is a private process whereby a neutral third party helps couples to identify and resolve contentious matters and negotiate a divorce settlement. Most states require divorcing couples to go through mediation or give judges the authority to require mediation before they are allowed to proceed with litigation. The mediator does not give legal advice or act as an advocate for either side, so each party should have independent legal representation. The average estimated cost of a mediated divorce is $7,000, but ultimately will vary depending on the complexity of the case, the mediator's hourly rate and the behavior of the parties. A family law attorney will counsel you on your legal rights and review the proposed settlement agreement to make sure it accurately represents your wishes.
Collaborative Divorce
Collaborative divorce (also called no-court divorce, divorce with dignity and peaceful divorce) is a new but rapidly growing approach to divorce whereby the parties share information voluntarily and work cooperatively toward a settlement. In a collaborative divorce, each party is represented by a specially trained divorce attorney. All negotiations take place with both parties and their counsel present. At the heart of collaborative divorce is a promise not to litigate if the case can't be settled out of court the parties have to start over with new lawyers. The estimated cost of a collaborative divorce is less than $20,000, but will vary based on the complexity of the case, professional fees, skill of the attorneys and the behavior of the parties.
Studies have shown that people are more likely to follow the terms of an agreement they helped create than one imposed by a court order, thereby decreasing the likelihood more time and money will be spent in the future on enforcement. To learn more about collaborative divorce, speak to a family law attorney.
Uncontested Divorce/Flat-fee Arrangements
Many law firms advertise flat-rate fee arrangements for preparing and filing the paperwork for uncontested divorce. A flat-fee arrangement might be appropriate if you agree on all issues, your assets are uncomplicated, you are confident there has been a full disclosure of all financial information (see sidebar), the children are well provided for and you consider the settlement you've worked out fair and reasonable. However, many couples entering a divorce do not agree on every issue, so don't assume that a flat fee will apply to your case.
Fees vary depending on the complexity of the case but generally start at a few hundred dollars for couples without children or marital assets and run a few thousand dollars for more involved cases. When hiring an attorney for a flat fee, it is important to understand what services the fee does and does not include it is very possible that your case is too complex to be covered by a flat-fee arrangement.
Other Divorce Options
Limited representation may be an option in the case of a simpler, uncontested divorce. For example, you can retain an attorney for advice and consultation, but prepare the papers and make routine appearances yourself in court. Beware, however, that if anything comes up while you are representing yourself, you may find yourself in a vulnerable position.
Another option is to go it alone. The Internet abounds with websites offering quick and easy do-it-yourself divorce kits that cost as little as a few hundred dollars. These kits contain legal forms that cover a variety of details such as personal property and real estate, alimony and name changes.
But while limited representation and do-it-yourself divorce are both options for some people, they are by no means appropriate for everyone. Whether your divorce is simple or complicated, amicable or adversarial, it is best to speak with an attorney at the outset. An experienced divorce attorney can help guide you towards a resolution that will minimize the emotional and financial cost of divorce. Even if you fill out all the forms on your own, it is imperative that you first consult with a divorce lawyer to ensure that your rights are protected. After all, your financial future and overall well-being not to mention that of your children is at stake.
Other Costs of Divorce
There are other issues that can be of financial consequence such as valuation of marital property, tax matters (e.g., who gets the dependent exemption) and finding "hidden" assets. Financial advisors, forensic accountants, real estate appraisers and other experts may add to the cost of obtaining the divorce, but ultimately help ensure a fair and equitable outcome. For example, if there is a family business, a business appraiser can conduct a valuation to make sure your spouse does not walk away with more than his/her fair share. Finally, it is important to take into account lifestyle changes necessitated by the reality of financing two households instead of one.
Divorce Lawyer
If you are considering divorce, a divorce lawyer can advise you on the best way to minimize your costs while protecting your legal rights and interests. The more you can agree upon, the less the divorce will cost you. Even in the most amicable situation, it is important to consult with an experienced family law attorney before you sign any divorce papers or you may lose your rights (e.g., the right to receive alimony)
forever.
Legal fees paid for tax advice in connection with a divorce and legal fees incurred to get alimony may be deductible on your tax return.