8 Ways to Lower the Cost of a Divorce
It's possible to reduce steep attorney fees if you're savvy
Divorce is painful, sometimes necessary and often expensive. Just ask Kathleen James of Downers Grove, Ill., who divorced at 50 and says she "woefully underestimated the expense."
These days, a traditional divorce for a couple over 50 (with a house, retirement savings and a lifetime of belongings) can cost up to $100,000, says New York City attorney and mediator Andrea Vacca of Vacca Law & Mediation. Fortunately, there are ways to keep divorce fees substantially lower than that. Here are eight of them:
1. Choose Your Divorce Process
The best way to reduce divorce costs is to avoid a trial. Most divorce attorneys will work to settle your case, but there are other approaches to consider.
In mediation, you and your spouse work with a neutral third-party mediator to reach an agreement. Dori Schwirtz, a Miami Beach lawyer and mediator at Divorce Harmony says mediation saves money because it "allows the couple to communicate directly with each other, eliminating the middleman (attorney)." Divorce mediation typically costs between $5,000 and $15,000.
Where your attorney is located impacts your costs, since lawyers bill for travel time.
In collaborative divorce, the spouses’ attorneys work towards a settlement, meeting with with both partners together to reach an agreement. A collaborative divorce for a 40+ couple might costs between $15,000 and $50,000.
2. Use Associates and Paralegals When Possible
You may be able to lower your attorney fees dramatically by using an associate, since associates charge less than partners. Randall Kessler, an attorney with the Kessler & Solomiany family law practice in Atlanta, points out that "the best attorneys have younger associates that are very capable. So ask if a younger associate can handle most of the case."
Similarly, paralegals can do some of the necessary legal work. "The more paralegals in the firm, the more affordable it will be," says Russell Knight of the Naples, Fla. Law Office of Russell Knight.
Attorney and mediator Susan Guthrie, of Breaking Free Mediation & Coaching in Chicago, suggests contacting your divorce attorney’s firm's paralegals or legal assistants with your questions since they bill at a lower rate.
Where your attorney is located impacts your costs, too, since lawyers bill for travel time. Says Vacca: "You may save on legal fees if your attorney is located close to the courthouse."
James regrets not choosing an attorney more carefully for her divorce. "I should have done what I would have done with a business decision — asked around, checked rates and decided on the best route for me."
3. Get Your Financial Records Organized
Divorce is a primarily financial transaction, so the more you can do to keep your legal eagles from spending time amassing your financial records, the more you will save.
"Almost half of what the divorce lawyer does is organizing the client’s file and understanding what the finances are," says Kessler. "If you can be very organized and get all of your banking records and financial records in an organized and orderly fashion, you will save a lot of the cost."
Doing this spadework yourself "can save thousands of dollars in fees," Guthrie says.
Attorney Jessica Emery of The Emery Law Firm in St. Louis recommends gathering three years of tax returns and three recent pay stubs; bank statements and credit card statements; recent statements for any mortgage or car loans; investment and retirement account statements and copies of titles and deeds.
The more you can get these documents electronically, which lawyers prefer, the better. Emery notes that paper documents cost more for lawyers to process.
4. Email, Don’t Phone
Your attorney's time is money, so be judicious about how you use it.
Email can be a time saver if you're clear and concise. Just be judicious about what you choose to email. Says Vacca: "While it may feel good to write an email that allows you to blow off steam, paying your lawyer to read that email may not be the best use of your limited resources."
Guthrie also advises that lawyers "do not need to be on every single email or text that you and your spouse send to each other."
If you do need to call your lawyer, Vacca says, "make sure it’s a scheduled call so that you are both prepared and focused on what has to be discussed. Have a list of questions ready and take notes during the call so you can refer back to them later."
That’s one thing James did wisely in her divorce prep. "I always had a running list of topics to cover and then was like, 'Okay, let’s wrap it up.'"
5. Avoid Paying for Appraisals When You Can
Appraisal fees for homes and vehicles can be costly. When you can, skip professional appraisers and agree with your spouse on a value.
Knight says, "For cars, just use Kelly Blue Book [a used-car value guide]." For your home, he says, "ask any Realtor to give you a comparative market analysis. They'll do it for free in the hopes of getting the listing. It's not as accurate as a paid appraisal, but it's probably close enough."
6. For Retirement Funds, Keep It Simple
Dividing up retirement accounts in a divorce can be expensive. You’ll likely need lawyers to draft what are known as Qualified Domestic Relations Orders or QDROs. A less expensive approach if the accounts are roughly equal: "You keep yours and I'll keep mine," says New York City attorney Chaim Steinberger.
If that's not possible, Schwirtz advises "swapping other assets instead of using a QDRO." For instance, one person could keep the house and the other could keep his or her retirement fund.
Vacca suggests avoiding a QDRO by rolling over 401(k)s into Individual Retirement Accounts (IRAs), since IRAs can be divided without a QDRO.
7. Divide Household Items On Your Own
You likely have a lot of household stuff to split. Vacca recommends figuring out who’ll get what yourselves. It’ll save on attorney fees, too.
"Don’t pay us to help you figure out how to divide your furniture, rugs, and dishes," she says.
And, she notes, "If you’re fighting over a lamp, it’s probably not about the lamp. Instead, it’s about all kinds of emotions tied up in that object. Try to get clear on what is going on emotionally before you pay your lawyer to fight it out."
8. Remember What Your Divorce Lawyer Is For
Perhaps the most important thing to keep in mind, says Schwirtz, is "absolutely do not use your divorce attorney as a therapist."
Adds Guthrie: "In addition to being more qualified than your attorney to help you with the emotional upheaval of divorce, a therapist is usually much less expensive."