- When it comes to getting divorced, many concerns come to mind – one at the forefront, however, is exactly how much the process is going to cost.
- According to a recent survey by Bankrate, the average cost of a divorce in the United States is around $US15,000 per person.
- However, it can be much higher, as many factors can impact the overall cost of divorce – including the length of time it takes for your divorce to go through, the people you hire, and whether you and your spouse settle in or out of court.
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The divorce rate is going down in the US – in 2017, the CDC reported an average of 2.9 divorces per 1,000 Americans, compared to 4 divorces per 1,000 Americans in 2001. Of the more than 2 million marriages that occurred in 2017, exactly 787,251 ended in divorce – resulting in a divorce rate of 35%. Although fewer couples are getting divorced in recent years, the dissolution of marriages is still an issue on many peoples’ minds. When it comes to getting divorced, many concerns come to mind – one at the forefront, however, is exactly how much getting a divorce is going to cost.
One thing to keep in mind when researching the average price of getting a divorce is that costs operate very much on a case-by-case basis. The overall cost of the process depends greatly on where you live, whether you and your spouse have children or not, whether you own property together, and many more factors. In general, divorces become increasingly expensive depending on three main factors: how long the process takes, who you hire, and how much you or your spouse are willing to fight to get what you want out of the divorce.
However, if you’re looking for the average expenses of each element of divorce, they are out there. According to a recent survey by Bankrate, the average cost of a divorce in the United States is around $US15,000 per person. This figure takes into account the following expenses associated with getting a divorce – court filing costs, attorney fees, parent education classes, mediation fees, costs for evaluations such as psychiatric evaluations or counseling, “guardian ad litem” fees, and other expenses that may pop up depending on your situation.
Bankrate also looked at the costs involved if the couple getting divorced owned property together. This included refinancing costs, government recording fees, and any additional hourly attorney fees.
In order to determine how much it actually costs to get divorced, we broke down each expense and included the cost estimates of each element of getting divorced. We also sought the advice of Jacqueline Newman, Managing Partner at Berkman Bottger Newman and Schein, LLP in New York City, who specialises in litigation.
Court filing costs
Divorce is classified as a civil matter. When you file for divorce, it effectively works almost like a lawsuit – one person must file the suit, and another must be served. The cost of filing for divorce varies by court and by state. However, LegalZoom reports that the average cost of filing a divorce is around $US300.
According to Thumbtack, attorneys charge a minimum of $US1,000, on average, for an uncontested divorce. However, attorney fees are often relative to exactly how long it takes for the divorce to go through, from filing until completion. Uncontested divorces tend to go through at a much speedier rate. Nolo reports that the average length of time it takes to get divorced is around 11 months – if your divorce takes less or more time, this may affect the cost.
Business Insider spoke to Jacqueline Newman, Managing Partner at Berkman Bottger Newman and Schein, LLP in New York City. Newman specialises in divorce law, especially in regards to prenuptial agreements and high-income divorce settlements and proceedings.
She explained that the longer it takes for a divorce to go through, the higher your attorney fees will be.
“Divorce as a whole is really expensive. Then, when you’re dealing with counsel fees, that’s a whole new level of expense. It depends on how much people want to fight. A line I use to clients when they come in and they tell me they want to fight is, ‘Would you rather pay for your kid’s college or mine?'”
Hiring an attorney to help you fight a contested divorce can cost anywhere from about $US2,500 to several thousand dollars, on average, or more. Going to court almost always adds costs and time to divorces. Nola reports that while divorce cases that settled out of court took an average of 9 months to complete, cases that went to court on any issues lasted an average of 17.6 months.
Newman also explained that most cases settle. In fact, more than 90 per cent of divorce cases settle prior to going to trial. “It’s just a question of whether it will settle now before you spend tens of thousands or even hundreds of thousands in legal fees, or if it’s going to settle later,” she says.
Mediation can save you money or add costs to your divorce, depending on how you use it. Mediators can sometimes be used in place of an attorney so you and your partner can civilly decide how you want to split up your assets and come to a settlement agreement without going to trial. Depending on where you live, a professional mediator may charge $US100 to $US200 per hour – this can end up costing roughly half of what an attorney would charge.
However, if the mediation proves unsuccessful and you still need to hire an attorney or go to trial, mediation fees can simply become an added expense.
Other added expenses can highly increase the overall average cost of divorce
Divorce comes with a laundry list of added expenses you may have never considered. Parent education classes, counseling sessions or psychiatric evaluations, and other added costs can dig you into a hole of financial turmoil. The average cost of a parent education class could range anywhere from $US85 to $US350. The cost for private counseling or therapy can range from $US50 to $US240 for a one-hour session.
If you and your spouse own property together, the cost of divorce can rise even higher
Many couples struggling to either cover the cost of their divorce or change the home’s ownership or mortgage moving forward will choose to refinance their home. Lenders can charge anywhere between $US100-$US300 for a loan application fee, plus other fees to appraise the home. You should also expect to pay document fees ($US200-$US400), title search fees ($US200-$US400), recording fees in order for the refinance to appear in public records ($US25 to $US250), home inspection fees ($US300-$US500), and the cost to perform a home survey ($US100-$US300), which documents the boundaries of the property. You may also need to hire an outside attorney in order to refinance your home during a divorce. This will cost an average of $US300-$US1200.
The average closing costs to refinance a standard mortgage loan in 2017 was 1.5%. Two factors that affect this cost can be your credit score and the type of loan you’re trying to get. According to The Lenders Network, on a $US200,000 mortgage, the average closing costs will come out to 1.5%, or $US3,000.
Other couples going through a divorce may choose to sell their house and buy two separate homes. This can end up being extremely expensive, as buying and maintaining two homes may be more expensive than owning one larger family home. In the end, you may not break even after selling your home once you have to purchase two other properties.
Make sure you have all the available financial information and arm yourself with a financially-knowledgeable team
When it comes to getting divorced and handling the financial burdens and pitfalls of the process, experts will tell you that knowledge is power.
“I’m a big advocate of being as educated as you can be going through a divorce. If you’re dealing with somebody who is not necessarily financially savvy or has lived the marriage in the financial dark – has no idea what’s going on – I think it’s very important to involve financial advisors early on in the process,” Newman said. “Seek the advice of accountants and other professionals to create your own financial team. This will allow you to be in a place where you understand what you’re agreeing to and what the [financial] ramifications would be after the divorce.”
Another way to equip yourself with as much information as possible prior to getting a divorce is to have a prenuptial agreement set in place. Prenuptial agreements are a way to know what you would receive or give up if you and your partner were to get a divorce. Jacqueline Newman explains that while prenups are not ideal for every marriage, they can be extremely beneficial if, down the line, a divorce happens.
“Most often in prenuptial agreements, you will deal with the financial ramifications of a divorce. Asset distribution will be determined, sometimes spousal support will be determined, so that can absolutely streamline a divorce,” she explains. “Things that are not addressed in prenuptial agreements are anything related to the children, such as child support and custody.”
Newman also explains that prenuptial agreements can potentially alleviate anxiety surrounding how a divorce will play out financially.
“A lot of people want prenuptial agreements, even if they don’t have a lot of money, just to have as much certainty as possible upon a divorce. Part of the reason that many people don’t get divorced is because of just not knowing what’s going to happen. If you are in a financial situation where things are laid out outside of any child issues, you’re in a better position to anticipate what a divorce would look like if you did decide to move forward with one.”
Divorce costs don’t end after you sign on the dotted line
The costs associated with divorce don’t end after the divorce is finalised. Whether it be through alimony payments, the costs associated with dividing a household, or the financial ramifications of the divorce itself, many individuals still find themselves paying years down the line.
Alimony payments are largely based on income, as well as how the assets and children were divided during the divorce. In divorce law, alimony is provided in order to maintain “the standard of living established during the marriage,” oftentimes when individual income after the divorce will differ greatly from income during the marriage. For instance, if a man earns $US5,000 and his spouse earns nothing, she will most likely be awarded alimony and child support from his income after the divorce. In the end, approximately half of your monthly income could potentially go to your ex-spouse.
Dividing one household into two also comes with its own hidden costs. Divorced individuals will be paying for everything separately – two homes, two cars, two sets of furniture, two insurance plans, multiple phone bills, etc. Taxes also differ greatly, and may be harder on your wallet, explains Jacqueline Newman.
“Divorce is very expensive. Beyond the fact that it’s obviously more expensive to have two households than one, you add onto that,” says Newman. “Filing jointly is usually the best tax bracket, and now you’re going to be filing separately, which is expensive. Tax deductions are different. You don’t get certain exclusions from capital gain. Divorce as a whole is really expensive…When you think about the cost of divorce, it’s not just about legal fees. It’s about all the differences in how your lifestyle is going to be.”
When it comes to your and your family’s future happiness, however, the cost of divorce is usually well worth it in the end.
- Read more:
- Jeff Bezos’ divorce could rank among the most expensive of all time – here are the 10 most expensive divorces ever
- The 12 biggest money-related reasons people get divorced
- Couples who go into wedding debt are more likely to consider divorce
- Why are millennials abandoning divorce? Sex, money, and their parents
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