EP 223: How Much Will Divorce Cost?

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One of the most common questions I get, and one of the biggest anxiety producing questions I get, is how much is divorce going to cost? How much should I expect to spend on the divorce process? And if you’re going to ask your attorney how much divorce is going to cost, they’re going to say it depends. And I’ve never known an attorney to give a straight answer when it comes to the cost of divorce. 

And so in this particular episode, I want to go through some considerations in terms of how much the divorce may end up costing you in terms of the financial check that you might have to write. So I’m going to just give some ranges and some considerations and things to think about as it comes to the divorce process.

Now everyone’s situation is different. Divorce can cost more whether you live in a city, versus a suburb, versus a small town. Divorce can cost a lot depending upon what assets you have, what needs to be done. There’s a lot of variations, but I’m just going to give you a range. And so on the low end, from what I see per person, I see the minimum, minimum, minimum, most people are going to spend on their divorce is about $5,000. And that’s for one person. And so it’d be $10,000 as a couple. And that’s assuming that everything goes smoothly in divorce, and yes, there are ways to make divorce go smoothly, but that’s your best-case scenario. 

Now, the normal range I see for people is usually in the 20 to I’d say 35 or $40,000 range per person. Sometimes it’s closer to 15. Sometimes it’s closer to 50, but that unfortunately is not uncommon when it comes to the divorce process. And sometimes if there’s just a lot of fighting, a lot of complication, the process is going to drag on for several years, the bills can get into the hundreds of thousands of dollars, and I’ve seen that too.

And so what I want to go through is first to be aware of the cost of the divorce, and if you’re going to be going down this path. I mean, that’s why you’re listening to this episode. There is a big expense, and you have to really think about what’s worth it, and what’s not when it comes to investing in the divorce process. And I want to go through a few ways in terms of explaining both how you could control the cost of divorce, and also how to figure out just a few quick methods on how to pay for it.

When it comes to minimizing or controlling the cost of divorce, really the biggest expense when it comes to divorce cost is how much you and your spouse disagree on certain items. To put it a different way, is if you and your spouse can come up with solutions on your own, and come up with as much of an agreement as you can between the two of you and not involve attorneys, the cheaper the divorce will be, the less expensive it will be. 

And so if everything is a fight, and I use an extreme example all the time, is I grew up with a middle-class family. They did well for themselves, saved, and they had several hundred thousand dollars of savings, and a house and the normal stuff. And they spent 100% of their money and then some fighting over everything, from not just the big items like houses and retirement accounts, but all the way to who gets the dining room set. And unfortunately, they ended up in the divorce process, they spent hundreds of thousands of dollars on legal fees, and that was all the money that they had.

On other examples, I know billionaires who’ve gotten divorced for less than $20,000, and that’s because they came up with an agreement ahead of time with their spouse. And yeah, maybe the check they’re writing to their spouse is going to be pretty substantial, but they knew what they were going to do. They were smart about legal fees, and they did a very good job with it. And so really it just depends on how much fighting there is.

And just some other costs to think about is if you go the full litigation process, where you get an attorney, your spouse has an attorney, and you’re going to discuss and fight about every detail. That’s going to start at a minimum of $10,000 a person. Every time you have to hire an expert, be it someone to do an appraisal for a business, do an appraisal for a house, do a forensic accountant. Each time one of those experts get brought in, expect that to be another 10 to $25,000 each, in addition to legal costs on top of that from analyzing the reports and discussing it. And if you were to take that to trial, that check just keeps getting larger and larger.

Divorce attorneys are very expensive. I mean, on the low end, I think a good attorney can be 250, $300 an hour. And on the high end, I know attorneys who are 900 to $1,000 per hour of their time. Imagine that. So a 15-minute conversation can cost you $150 sometimes, with your attorney, or sometimes just sending a one-off email. And so you need to be very smart about how you interact with your attorney, and how you use that attorney.

I already mentioned other professionals, but there are also court fees. You have to think about an attorney’s full team, paralegals, assistants, et cetera. There’s a lot that can go into a divorce and divorce fees. And so one of the questions that you should be thinking about, and one of the most important things we talk about in the divorce process, or I talk about on coaching calls, is how are you going to pay for this? That’s one of the most important questions that I get from people all the time.

And I’m going to go through just a couple of quick items to think about. If you have money in a joint account, generally speaking, you’re entitled to half of those funds. Generally speaking. So if you need to withdraw half those funds to start putting your little war chest together for attorney’s fees, then you should do so. 

Now by doing so, you’re also going to definitely be tipping your hand in the divorce process, but that’s something that may be necessary, particularly if you didn’t originally have funds to go through the divorce process. If you have savings, then you can consider using your savings. If you have savings in your own name, if you need to borrow funds from a friend or a family member to make the initial retainer for an attorney, then borrow funds from an attorney. 

And then there’s also retirement accounts and home equity lines, and other things like that you should be thinking about. But when you walk into an attorney’s office and say, “Hey, I want to hire you for my case”, you should be expecting to write a check for anywhere between five and $25,000. The day you hire that attorney and anywhere within that is very much normal range.

And so I just want you to be really cognizant of the cost of divorce, and the things that you can be thinking of. The biggest factor as I said is acrimony. And so if you can come to, and I work with a lot of people in this situation, where you and your spouse, let’s just say, there’s 10 issues that you’re discussing and have to fight over, if you can get to an agreement on eight of them, and then you only have to work out two issues, then that can save you a lot of money in your divorce because there are only two things that need to be discussed versus starting from scratch with all 10.

And so things like that can help you save money in divorce, and maybe it can be a small thing like, hey, if you can start a negotiation when possible with your spouse, it’s not always possible to negotiate with them. But if you’re in a situation where you can say, “Well, I think we’re going to both keep our cars.” Well, you’ve already started an agreement on that. 

And that’s one less thing you can check off the list, and just getting the cars agreement set in stone before having attorneys have to negotiate over it could end up saving you a few thousand dollars. So sometimes even a smaller items that you can come up with a can help you, but if you continue to drag out the process and every attorney wants to beef up there, I won’t say every attorney, but it doesn’t hurt the attorneys when you have more to fight about. It’s something to be aware of as you go through the divorce process.

So just as a quick recap, on the low end, divorce can be five or $10,000 a person to get things done. If you have an attorney involved, and on the high end, it can go, I’d say the average is usually around the 25 to $50,000 range. But if you are fighting about everything and this goes to trial and you have money to take it all the way to trial, legal fees can get to $100,000 or more. So be very wary and very well prepared when it comes to figuring out what’s the right investment that you need to make for your case. 

And sometimes I’ll tell people like, “Hey, I don’t know if you want to spend an extra $10,000 on this issue, because it may not be worth it for you,” but other times I’ll say, “Yeah, you know what? You should spend $25,000 on this issue because if you get $300,000 in return, that’s a useful return on investment to invest in legal fees.”

Every situation is different and there are always lots of complications depending upon what’s going on, but be prepared for the cost of divorce if you’re going in that direction, and go in with eyes wide open. Regardless, it’s going to be an expensive check that you’re going to write, and it’s up to you to be prepared for it, and determine what really is appropriate given my circumstances that you’re willing to put into this process to secure your future and get through it in one piece.

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