CMDR Published: August 7th, 2019
Some who are faced with the prospect of divorce, are deterred by the sheer magnitude of change that will impact their family’s lives; they worry about the reactions of their children, their friends, their parents, and their siblings. In fact, they worry about everything– not least of which is the price tag associated with the the actual divorce process. They have heard, and read, again and again, of the exorbitant cost of divorce. When faced with the many emotional and financial unknowns, it is not surprising that some people simply procrastinate; they become immobilized, unable to start the process, despite having made the decision to divorce. Whether it is one or both spouses that hesitate, the process is likely to be halted until some of those worries are put to rest, either by researching options, getting recommendations from therapists or friends who have been through it, or some combination of both.
Admittedly the divorce process is not easy for anyone. Yet perhaps it will help, even a bit, if you know generally what to expect. We will try to clarify some typical areas of confusion; options for the Divorce Process itself, and the general areas of expense of the process. s And too, it will help to have some tips for keeping the costs in check, and the emotions from escalating out of control. Knowledge is power. So let’s talk frankly about the “true” cost of divorce and what steps you can take to mitigate the negative impact on family members, including yourself and your spouse.
Quantifying The Cost of Divorce
It is difficult to calculate the total cost of the divorce process, as every situation is unique in its own way. However generally there are three areas of expenses: The Negotiation Process Options The Peripheral Costs of Settlement Process Agreement Drafting, Court Filing, Court Representation
I. Negotiation Process Options: Using Two Lawyers or Using One Mediator
The first so-called expense area can be labeled as the costs associated with the “negotiation” or mediation process. Here the couple is engaged in the actual process of reaching a settlement.
The Two-Lawyer Negotiated Divorce Process:
Each client is required to put down a retainer, an upfront payment from which the attorney draws his/her fees as they are incurred. When the retainer is exhausted, the client must make another payment if he or she expects to continue to be represented by the attorney. It is not unusual for additional “retainer” payments to be requested if the case becomes more involved than the attorney had initially assessed.
The actual attorney charge, drawn from the retainer, is based on an hourly rate for individual client-attorney meetings as well as other client-attorney communications such as telephone calls, emails, and texts. Communication with ancillary office personnel may also be charged, not to mention work performed by legal associates. In addition to these kind of one-on-one interactions, typically there are also four-way meetings in which both spouses are present with their attorneys. The objective of the meeting is for all involved parties to present their positions, propose settlement ideas, and ideally to negotiate a settlement. At times the meeting may include a legal team for one or both of the clients. Not infrequently the time frame surrounding the negotiation process may take a year or longer.
No one should be surprised about the time, for after all, as we know, each lawyer is charged with reaching the best deal for his or her client and only for his or her client. It is not either lawyer’s purpose or mission to concentrate on the well being of the whole family. The central theme for each lawyer is like a one song opera, entitled the “winning client.” Although we are all aware that real victories, total victories, are few and far between and that even with victories, the costs, in time, money, and psychic tolls may transcend the actual victory, legal clients often believe that a victory may be in the offering. Not to be overlooked, but beyond the scope of this article, are the truly protracted and expensive proceedings of litigated divorces, leading up to a trial in which the judge, not the clients and not the attorneys, determine the end result.
The Mediated Divorce Process:
In contrast, the mediation process is generally shorter, with the average length of time for setting the terms of agreement, being about seven two-hour sessions, and assuming mediation meetings are spaced about, and hopefully not longer than, 2-3 weeks apart. The hourly rate of a mediated divorce process is similar to that of the attorney-directed divorce, except that in the latter process, there are two attorneys being paid. Some mediators require a retainer, while others allow clients to pay “as they go,” ie. at each mediation session.
More important to keeping “in check” the overall cost of one process over the other, is not the rate or types of fees charged, but rather the cost-saving nature of the mediation process itself. Simply put, mediation is an efficient process. The mediator meets with both parties at once and, as such, decisions can be made in real time, with the” inputs” and the “counter inputs” discussed as they arise, and not postponed until the the “other party” and his/her attorney can schedule a meeting.
The momentum of a forward moving process results in a significant savings of time and by extension, of money. Moreover, the mediator, as an impartial facilitator, is focused on the fairness of the final agreement. A specific benefit of mediation vs. the two lawyer process, is that because both parties are meeting together, to make decisions real-time, each person will be better informed about the advantages and disadvantages of all decisions. So the process of understanding your financial outcomes begins at the moment mediation starts- which for some spouses who have not typically been in that role, is a big advantage. In mediation, both spouses have input and need to understand the financial and tax implications of the decisions they are making, as well as the emotional advantages or disadvantages to the the party’s spouse and the rest of the family. Herein lies another major benefit: In mediation clients are informed, and they understand the alternatives, options, and implication of their final choices.
II. The Peripheral Costs of the Settlement Process
The second so-called expense area can be labeled as the peripheral costs of the settlement process. Here are a host of different costs that can include appraisals of property, fix up costs for sales and taxes associated with the sale. Then, too, financial analysts and/or accountants may be retained to evaluate the settlement’s impact on each party’s post-divorce finances. Will each one be able to maintain the marital standard of living? Will there need to be cut backs? Does one party or both parties have to seek different or new employment? Where will each one live? What happens to funding children’s activities and their college education? And so on and on the questions mount.
III. Agreement Drafting, Court Filing, Court Representation
The third cost is the actual drafting of the parties’ agreement and, once agreed upon by all parties, the preparation of court documents to be filed with the parties’ Separation Agreement, as well as the presentation to the court for judicial approval. Undoubtedly there are many other associated costs, to and from, the divorcing process. The emotional impact of separation and divorce cannot be quantified in terms of dollars, nor underestimated in terms of its ramifications for each involved individual as well as for all family members. Yet, despite all the negatives, it is indeed possible to have a “good divorce,” a divorce that is handled with reason and dignity and based on an understanding of the issues at stake and the steps needed to be taken in order to reach a settlement that is equitable and workable, in the present and in the future.
For over three decades at the Centre for Mediation and Dispute Resolution, we have been in the business of helping people to fashion a “good divorce.” Mediation is our only business and for our divorcing clients, the “good” divorce is the only option. Our clients are helped to express their priorities, their concerns, and their needs. They are encouraged to focus on structuring an agreement that leaves both spouses “whole” and especially provides for the best interests of their children. Agreements that are mutually beneficial are structured on a firm understanding of the economics of the situation, present and future, and of the law that underlies their decision-making. The savings in cost at the outset and in the long run are indeed immeasurable.
It is our hope that having some knowledge about the unknowns of divorce will enable those who feel overwhelmed, to take those first difficult steps – after which the many decisions and emotional challenges become manageable, if not easy.