- The dissolution of your marriage could be the biggest expense you never saw coming.
- To limit how much of a financial strain a divorce puts on your family, experts recommend you keep these key tips in mind.
You probably never dreamed of what it would be like to walk down the aisle in divorce court.
But for many couples, that's exactly where their marriage ends. And the cost of that legal transaction can take a huge toll on a family.
The tally for a divorce can range from $5,000 to well over $1 million, according to Madeline Marzano-Lesnevich, national president of the American Academy of Matrimonial Lawyers. "Every case is different," she said.
Michelle Buonincontri, a Scottsdale, Arizona-based financial advisor who specializes in divorce, found this out first hand. She estimates the dissolution of her own marriage cost her family $200,000.
"We weren't a family with millions; $200,000 is a lot of money," Buonincontri said. "That would have been much better spent in our own pockets."
But with some education and a lot of preparation, experts say there are ways you can avoid racking up a big bill.
How much you will pay depends a lot on your legal representation.
The American Academy of Matrimonial Lawyers provides a directory of lawyers that is searchable based on your geographical location. These attorneys have been vetted according to a host of qualifications standards.
Once you have a list, start talking to different attorneys, Marzano-Lesnevich said, and pay close attention to who is really listening to you.
"You have to feel connected to your attorney, and I think either you feel that on your consult or you don't," Marzano-Lesnevich said.
Ask up front what your attorney will charge you for their services.
"That's where I see people make a mistake in the beginning, is they sign an engagement letter and don't ask the hourly rate," said financial advisor Megan Gorman, managing partner at Chequers Financial Management in San Francisco.
You also want to ask if a junior attorney or paralegal will be working on the team, which can help defray some of the expenses because their work typically costs less.
Because attorneys charge by the hour, any extra work you throw at them will cost you.
By doing some of that work yourself, you can reduce the time and money you spend with your attorney.
That means having key documents organized. Marzano-Lesnevich said she has had clients come in with a binder of documents, with each document indexed and labelled. "It can be quite the money saver," she said.
Try to group any inquiries you send to your lawyer together to reduce the amount of time they spend on them. Instead of sending an email each time you think of a question, send one email listing everything you want to know.
Mediation or collaborative divorce can save money by keeping your divorce out of court — provided those methods are right for your situation.
Mediation involves working with a neutral party, who may or may not be a lawyer, to come to an agreement. As long as you reach a consensus, this can reduce costs. But if you don't, you will need to start over.
Collaborative divorce happens when a resolution is pursued with the help of the spouses' respective legal representation, as well as other professionals such as financial advisors or therapists. The downside is that both attorneys can no longer work on the case if you cannot come to an agreement.
The risk with these methods is that there is pressure to come to a deal, and there can be financial blind spots in the process, according to Jeffrey A. Landers, a divorce financial strategist and president of Bedrock Divorce Advisors in New York City.
You may have to take your spouse's word on certain areas like bank accounts or closely held businesses because those records cannot be subpoenaed, he said.
"I tell my clients, 'Look, you don't have to agree to anything,'" Landers said. "If you can't come to a reasonable agreement, then don't agree to anything."
You want to strike a balance between protecting your interests and being willing to bargain.
The key is to try not to get too hung up on any one area of the deal.
"Virtually everything is on the table, so don't get set on one thing or one set of things that you're not willing to negotiate with your spouse," said Russ Thornton, a financial advisor at Wealthcare for Women in Atlanta.
If you have children together, keep in mind that some financial concessions could help keep peace in the family long term. "You are going to see them at every baptism, wedding and funeral," Gorman said.
What worked for your friend, neighbor or family member in their divorce will not necessarily apply to your situation. And if you let outside advice confuse you, it could muddle the divorce process.
"Your situation is unique, regardless of what you've heard or read or been told about someone else's experience with divorce," Thornton said.
You also want to remember that dissolving your marriage is emotionally taxing. By seeing a therapist and exercising or meditating, you can make sure you are in the right frame of mind.
"Do the things to ensure you don't get triggered during the process, because that will drive up the costs," Buonincontri said.