What Makes Divorce Expensive?
Let’s just get this out of the way from the start. There are many ways to get divorced. You can represent yourself – a kind of do it yourself method. You can choose mediation or a collaborative practice process. Or finally, you could select litigation. Obviously (and I hope it’s obvious), litigation is the most expensive way to go.
Numerous factors cause a litigated divorce to be expensive. Proceeding through the court system usually involves using an attorney who requires a retainer and charges an hourly fee. There are various court costs such as the filing of a Petition, a Response, and Motions. If your matter cannot be resolved, then you may choose to have a judge or jury trial, which can exponentially increase your expense. As the case progresses, there may also be a request for a child custody evaluation, in addition to potential adult and/or child therapy sessions. As discussed below, other expenses may come into play such as an asset evaluation, and the potential use of a variety of specialists including tax, accounting or child experts.
Another key factor in determining your fees is how your soon-to-be ex-spouse handles your case. This can escalate your costs, or keep them manageable. If a scorched-earth tack is taken, your entire community assets may be spent on attorneys’ fees, and leave nothing to divide. Even if the other side’s attitude is not hostile, the attorney may have a disagreeable personality and cause everything to be more difficult to accomplish and therefore, more expensive. In essence, an attorney can choose a litigation path that exacerbates the fear and heightens conflict in this situation and escalates costs. Alternatively, an attorney can chose a path, which avoids drama and conflict and make divorce easier, quicker and less expensive.
An additional cost inflator is a divorce that involves complex, unusual, or large amounts of financial assets, whichtypically require financial experts to value the financial assets and a fair amount of negotiation to reach a settlement over how to divide the assets. Some financial assets are difficult to divide in a divorce due to legal issues with who can hold title to the assets or merely finding ways to divide typically indivisible assets. Not all financial assets are easily sold or make sense to sell at the time of divorce, which can add another wrinkle in the property division. With the sale or transfer of financial assets can come tax implications for one or both parties and therefore including a tax professional is often necessary. (Cha-Ching!)
These issues can hold true not only for passive financial investments, but also for active business interests in which one or both spouses have management and/or ownership interests in a business. The business may not only be a source of assets for the marital estate, but also may be a source of income for one or both spouses. Valuing the assets plus analyzing the revenue stream may require expert valuation. If there are other owners in the business then that can create additional problems in negotiating how to deal with the parties’ ownership in the business as the other owners likely do not want to have the business become subject to the post-divorce involvement of both spouses.
Another cost inflator is fighting over custody issues. When the children become a focus of conflict in the divorce there are a number of expenses that may accrue. One or both parents may ask the court to appoint an attorney ad litem, a guardian ad litem, or an amicus attorney. These third parties provide various roles on behalf of the court or the children to advocate for the interests of the children rather than the parents. They can be helpful, but the parties will be the ones financing the costs of that third party. There may also be expenses involved in home studies, therapists, counselors and other professional services related to the children and their role in the conflict.
However, the ultimate sinkhole for money in a divorce is a Trial. Between the waiting for courtroom time, witnesses, experts and jurors, and the presentation of the evidence, you have very little control over the cash flow for this endeavor. Ultimately, the emotional benefit of having your day in court rarely matches the emotional detriment of spending all that time and money. Many people labor under the impression that by having their day in court, the judge will declare them the better spouse and give them a landslide victory on the property and child issues. That is generally not what happens. Judges tend to divide assets 50-50, and do what’s in the best interests of the child using their criteria, not yours. So ultimately bushels full of money are spent and no one is happier, just financially broke.
There are alternatives to litigation and an expensive divorce: mediation. There are no dueling lawyers and expensive court battles. Both parties come together with honesty, transparency and in good faith to reach an agreement, which they can live with and is in the best interests of their children. In this way, you are saving money, time, stress and energy that could be better spent moving on with your new lives.
At Peace Talks, our goal is to keep your costs at a minimum while at the same time to provide efficient, comprehensive, and emotional support and guidance through this family trauma. With excellent financial advice, you are able to strategize an agreement, which works best for your family needs and future. Call Peace Talks, and learn the definition of a “peaceful divorce”, and retain the financial ability to proceed forward with your life.