Editor’s note: This is part five of an ongoing series throughout this year focused on helping older adults navigate the financial difficulties of gray divorce. See below for links to the other articles in the series.
The key distinction, put bluntly, between getting divorced in our 30s or 40s, vs going through a gray divorce later in life, is our mortality. When we’re older, we simply have less time left in our lives to recover from the financial setbacks of divorce.
For that reason, the message I continually stress to my older clients in the early stages of divorce is that we need to explore alternatives to the litigious process. Lawyering up, to the degree that it sets in motion our ensnarement in the “divorce industrial complex,” is extremely costly, both emotionally and financially.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Two caveats:
- Sometimes the litigious process is unavoidable, particularly in cases of spousal abuse and financial malfeasance. Or when you simply cannot communicate with your spouse.
- Do-it-yourself (DIY) divorce is rarely advisable. One of the few things worse than divorce is having to relitigate it years later due to errors caused by trying to save a few dollars in legal fees. You should get legal advice. You just probably don’t need to pay tens of thousands of dollars for it.
Understanding the costs associated with different divorce methods can help you make informed decisions. This article will focus on the financial costs of the legal process itself. I will compare the legal costs of a litigated divorce, mediation, Collaborative Divorce and a new process called Amicable Divorce. Of course, how much your divorce will cost depends on the complexities of your unique situation, including:
- How much conflict exists between you and your spouse?
- How many contested issues are you dealing with?
- Will the divorce go to trial?
- What state do you live in?
About litigated divorce
Litigated divorce, what we often think of as traditional divorce, involves resolving disputes in court. Each spouse hires an attorney, and the case, if it goes to trial, is presented before a judge, who makes the final decisions on issues such as asset division and support payments.
Costs of a litigated divorce:
Attorney fees. Attorneys typically charge hourly rates ranging from $200 to $500 or more. As noted above, the total cost can vary widely based on the complexity of the case and the duration of the litigation. Most litigated divorces settle before trial as the fear of an impending surge in legal fees pushes parties back to the bargaining table.
Court fees. Filing fees and other court-related expenses can add several hundred dollars to the overall cost.
Expert fees. If the case involves complex financial issues, experts such as financial analysts and/or business valuators may be required, adding to the cost.
Average cost: A litigated divorce can cost between $15,000 and $30,000 per spouse, with some longer and more complex cases easily exceeding $100,000.
About mediation
Mediation is a less contentious approach in which a neutral third party, the mediator, helps the spouses reach a mutually acceptable agreement. The mediator does not impose decisions — rather, they facilitate communication and compromise.
Costs of mediation:
Mediator fees. Mediators typically charge hourly rates ranging from $100 to $300. The total cost depends on the number of sessions required to reach an agreement.
Attorney consultation fees. While not mandatory, some individuals choose to consult with an attorney during the mediation process, adding to the cost. I advise my clients to both consult with and get an attorney to draw up the final paperwork.
Average cost: According to DivorceNet.com, the total cost of mediation is generally between $3,000 and $8,000. This cost is often significantly lower than litigation due to the shorter duration and reduced involvement of attorneys.
About Collaborative Divorce
Collaborative Divorce is a structured process in which both spouses hire specially trained attorneys who work together to negotiate a settlement without going to court. This approach emphasizes cooperation and problem-solving.
Costs of a Collaborative Divorce:
Attorney fees. Attorneys in a Collaborative Divorce typically charge hourly rates like those in litigation. However, the cooperative nature of the process often leads to fewer billable hours.
Team fees. The collaborative process typically involves other professionals, such as financial advisers and mental health professionals, whose fees add to the cost.
Average cost: A Collaborative Divorce can cost between $15,000 and $30,000 (or more), depending on the complexity of the case and the professionals involved.
About Amicable Divorce
The Amicable Divorce Network is a group of vetted professionals committed to helping parties through the divorce process in a low-conflict and efficient manner. Amicable Divorce differs from Collaborative Divorce in several important ways. A key distinction is the flexibility of the process, which can reduce costs.
Costs of an Amicable Divorce:
Attorney fees. Attorneys in the Amicable Divorce Network typically charge hourly rates like those in litigation. Once again, the cooperative nature of the process often leads to fewer billable hours.
Team fees. The Amicable Divorce process may not require professionals other than attorneys. The Amicable team is customized for the needs and budget of the family so it may be less expensive than Collaborative Divorce.
Average cost: Amicable Divorce Network statistics show an average cost of about $6,500 per spouse.
Key factors that influence divorce costs
Complexity of the case. Complex financial situations, business valuations, alimony and high-conflict relationships increase costs across all methods.
Duration: The longer the process, the higher the cost. Litigation often takes longer than the other methods described.
Professional involvement: The number and types of professionals involved (attorneys, mediators, coaches, financial advisers) directly impact the total costs.
Mediation, Amicable Divorce and Collaborative Divorce generally offer less costly and less adversarial alternatives to litigation. However, the best choice depends on the unique circumstances of your case. Consulting with professionals and thoroughly understanding each option early in your divorce can help you make the best decision for your situation.
I work with divorce professionals across the country who specialize in each of these approaches. If you are in the early stages of divorce and you’d like to learn more, please email me at andrew@wiserdivorcesolutions.com for a free 20-minute consultation.
Other Articles in This Series
- Introduction: Happy New Year: Let’s Get a Divorce
- Part one: How Does a Gray Divorce Affect Social Security Benefits?
- Part two: In Gray Divorce, Two Financial Planning Yardsticks Are Key
- Part three: Don’t Forget to Update Beneficiaries After a Gray Divorce
- Part four: What Is a Lifestyle Analysis in Divorce?
Related Content
-
Six Missteps to Avoid as You Transition to RetirementDon't lose sight of your finances when you finally reach retirement. These six classic missteps can chip away at the nest egg you’ve worked so hard to build.
-
Why Does One Claim Jack Up My Insurance After Years of No Claims?Even loyal customers can be hit with an insurance premium hike after a claim, despite going many years without any claims. There's a reason for that.
-
To Future-Proof Retirement Security, We Need Better StrategiesWith retirees living longer and the inequalities that affect women and people of color, the retirement system needs some optimization. Here’s what would help.
-
Here's Why We All Win When Charitable Dollars Go to WomenGiving to charities for women and girls not only has a lasting impact on their lives — it also benefits society as a whole. Here’s how to start investing.
-
For a More Secure Retirement, Build in Some 'Safe Money'To solidify your retirement plan, write it down, reduce your market risk and allocate more safe money into your plan for income.
-
Five Steps to a Mindfully Fearless CareerIf, like many women, you're struggling with imposter syndrome, try developing an athlete's winning mindset. It's as simple as facing one small fear every day.
-
Six Ways to Optimize Your Charitable Giving Before Year-EndAs 2024 winds down, right now is the time to look at how you plan to handle your charitable giving. The sooner you start, the more tax-efficient you can be.
-
How Preferred Stocks Can Boost Your Retirement PortfolioHigher yields, priority on dividend payments and the potential for capital appreciation are just three reasons to consider investing in preferred stocks.
