A divorce is certainly a costly time emotionally, and unfortunately, may also be costly financially. Having a full understanding of what costs to expect going in may help weaken the impact and stress going through the divorce process may cause.
The easiest answer to this question is "it depends." While that answer alone does not shed much light on the financial hurdle a divorce may pose, when the main issues with divorce are considered, the price of ending a marriage becomes a little clearer. Below is a general break down in common divorce issues that can get costly.
What Factors Cause Divorce Costs to Vary?
- Contested or Uncontested – An uncontested divorce will universally cost more than one that is contested. Put simply, the more spouses can agree upon and the more spouses can avoid spending time in court, the better. Before factoring in attorney’s fees, court costs and fees will come into the picture with each paper that is filed with the court. While there are certainly reasons for contesting a divorce, it is more desirable, from a costs perspective, to have a collaborative divorce.
- Net Worth – This is not to imply that being worth more will make a divorce more costly, but simply to say that the more someone owns, the more that an appraiser, forensic accountant, or other analyst will need to determine the value of, and the more that will ultimately cost each party.
- Children – Again, this does not imply that children are a financial burden in a divorce proceeding. However, in the invent a guardian ad litem is appointed, an expert is deposed or testifies, or psychological examinations and custody evaluations need be conducted, the more it will ultimately wind up costing the parties.
- Assorted Costs – Again, these will rise and fall, depending on assets concerned and if there are children involved. For example, a parent may order mandatory parenting classes for both parties. Additionally, if there is real estate, refinancing and recording deeds will ultimately make the process more expensive.
- Attorney’s Fees – Generally, each party will be responsible for paying their own legal fees, with some notable exceptions. A court ultimately has the power to order attorney’s fees, and may do so if:
- There is a large gap in financial status of the parties
- One spouse is unable to afford adequate representation
- If splitting the estate will require a significant amount of court time
What Goes into Determining a Lawyer's Fees?
Most divorce lawyers will charge a flat fee or hourly rate. With a flat fee arrangement, expect to pay anywhere between $900 - $6,000.
A flat fee method of billing should not be confused with a discounted or "bargain bin" form of representation. In fact, the disparity in the pricing is an indication that there cannot possibly be one accurate general price pertaining to what a case will cost. However, and fortunately, experienced divorce lawyers have effectively narrowed down how much what kind of work goes into a divorce. After a consultation, a lawyer should have an idea what may go into a case, including:
- Motions that need to be filed
- Motions that need to be defended
- Trial and possible appeal
If a divorce lawyer is charging a flat fee, they have likely made an evaluation that they can handle a divorce with minimal friction along the way. The reason for the flat fee system is simple: less stress, more certainty. Many clients going through a divorce have enough to worry about and would rather not be concerned if whether the last 20 minute phone call with their lawyer is going to cost them $100. Where money between the parties is not an issue, this type of fee structure seems unnecessary, but where the parties are concerned about going bankrupt just to pay legal bills, a flat fee attorney may be ideal.
There is one important note regarding the flat fee structure. Many attorneys who offer this type of fee structure will have to add different fees if different circumstances arise. For example, if a lawyer offers a $1,000 flat fee to handle an uncontested divorce, and the other spouse has a change of heart and makes things difficult or any other unforeseen circumstance arises, that lawyer will likely finish work under the initial amount quoted, and them offer another fixed, flat rate fee to handle the other issue. The end result is the same - the client knows what to expect from a billing perspective.
Why Would Lawyers Charge an Hourly Fee?
Hourly rates will also vary greatly, depending on the relative ability of the lawyer. On average, expect to pay $200-400 an hour for a lawyer’s time. Remember, a lower hourly rate is in no way indicative of the quality of representation, but simply what the lawyer has determined their time is worth.
A lawyer who works on an hourly rate may also require the payment of a retainer; these typically start at around $5,000. This retainer will cover a certain amount of that lawyer’s time. After the retainer is expended, a standard or discounted hourly rate will apply.
With an hourly fee structure, it is not uncommon for legal bills to get into the $10,000 range quickly. Thus, this type of billing system is most common where the parties are contesting several issues, there is a large estate to divide, or several other complicated divorce issues are in question.
Will the Attorney's Fees from My Divorce Be Tax Deductible?
Generally no. However, there are a few exceptions.
Any fees the attorney charges to produce or collect on alimony, child support, or any tax related advice the attorney gives in relation to the divorce may be claimed. Additionally, any fees incurred as the result of research conducted on tax issues may be deductible.
It is important that the lawyer keep these hours separately accounted for, not just for the sake of accuracy, but in the event of an audit as well.
Is One Fee Structure Better than Another?
Not in the slightest. The fee structure best suits you as the client is the better fee structure, and family law lawyers understand that. It is, however, always better to understand what you are agreeing to and what you are paying for. Knowing the basics of a divorce lawyer’s fee system and how it works is the first step to starting a dialogue about the fee structure and why they settled on the billing system they did.