Divorce can be hard on your emotions and your wallet.
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Between lawyers, accountants, court fees, mediators, psychologists and buying and furnishing a new home, the bills can easily add up when splitting assets and negotiating children.
“You are already in a stressed mental state and have to put up with a legal process that moves very slowly,” says Randy Michel, family law and estate planning attorney in College Station, Texas.
To avoid coming out of a divorce in debt, once you start the proceedings, don’t spend money you don’t have, says Greg Ortiz, owner of law firm Ham & Ortiz. Create a budget and stick to it. As you go through the process, there are ways to save money, here’s how to do it:
Going to court isn’t the only way to get divorced and should be a last resort, says Randy Kessler, founding partner of law firm Kessler & Solomiany, adding that mediation or collaborative procedures are the two cheapest ways to get a divorce.
Mediation can also give you more control of the outcome, says Ortiz since most of the proceedings can be done without a lawyer—saving a lot in fees. However, experts suggest having, at a minimum, a lawyer review the final agreement before it’s signed to make sure you don’t make a costly mistake. Some deals can’t be changed once the divorce is final.
Arbitration is a litigation process that’s quicker and typically less expensive than going to court, according to Ortiz. There’s no wait time, and an arbitrator, who you pay for, makes those same decisions that a judge would.
In a collaborative divorce, to help reduce costs, you may share an accountant and therapist with your soon-to-be ex, says Ortiz, but you cannot share an attorney. Collaborative divorces aren’t allowed in every state, and parties sign agreements that they will not file motions or pleadings with the court.
For couples that have to go through court, the wait time to appear before a judge can be expensive because of lawyer fees, says Michel. There could be three or 33 cases scheduled at the same time as yours, and a one-hour hearing can easily take up to six hours, which you will be billed for.
“Don’t be afraid to ask a lawyer about fees and what they can do to save costs,” says Kessler. You can have friends write statements, for example, and then your lawyer can figure out who to use and what to ask. Also, your lawyer may have less-expensive staff to help with non-legal questions.
To reduce the amount of time spent in your attorney’s office, do your homework and always come prepared. “Do a chronology of your life,” says Kessler. Writing what happened helps your lawyer highlight what they need to know for your case. Your lawyer’s staff can review your chronology at a lower rate and summarize parts for your lawyer. Your lawyer will also have this history available at all times.
Be Reasonable With Assets
Think long and hard before dragging out discussions on dividing up assets, say Ortiz.
“It’s a cost-benefit process—rethink how you operate. Do you want to spend thousands of dollars fighting over a $500 piece of furniture?”
Experts suggest finding ways to deal with your emotions to avoid prolonging the process.
“Your lawyer’s not your therapist,” says Kessler. “You don’t want to pay your lawyer to tell you it’ll be OK—a lawyer’s a very expensive way to vent.”
Find Common Ground With Children
“The biggest thing people fight over are the kids—they fight tooth and nail for the kids,” says Ortiz. A parent who wasn’t involved with their children during the marriage may now want to split time 50/50 and be more active.
“When you go through this process, you have to rethink how you look at life,” says Ortiz. If someone provided all the care for a child in the past, he or she may not be able to continue this after a divorce and needs to be OK with the other parent’s participation.
Unlike property issues that can’t be changed, you can change the arrangement with children after a divorce—they’re a moving target, says Ortiz.
Hire the Right Professionals
You may need to hire lawyers, accountants and other specialists. “Don’t be pennywise and pound foolish,” says Laurie Dyke, certified public accountant, founder and managing partner of IAG Forensics. “If you hire someone good who knows what they’re doing, you’ll get the work done faster and more efficiently.” An accountant can review your tax returns faster than a lawyer and you’ll be billed fewer hours.
When you hire an accountant, says Dyke, he or she will make sure the settlement is fair and that you’re considering taxes when valuing securities—all assets are not created equal. “Lawyers know what they can do in accordance of the law but it’s not their job to understand financial valuations.”
Don’t Represent Yourself
“People try to go through their own divorce or represent themselves but if their emotions are off, they can’t make good decisions for themselves or negotiate well,” says Ortiz.
If you decide to go through mediation, which doesn’t require an attorney, Ortiz suggests having an attorney review the agreement because you may have made a bad deal. “Either pay for it now or pay for it later trying to clean it up which is not always possible,” says Ortiz.
Experts suggest being organized with your documents and communications. “Use your professionals wisely,” says Dyke. Attorneys bill for time spent answering emails and phone calls, so be judicious with your communications.
“Hold emails and phone calls to a minimum and make a list of question that you want to talk about,” says Michel. “Don’t just ramble.” When you bombard your lawyer with emails and phone calls, they’ll be obliged to respond to each request and time translates into money. It takes just as long to answer one question as it does five.
If your accountant or lawyer asks for the year’s financial statements, provide these to them at one time and organize your papers. “If a client brings a box of statements, the lawyer or accountant will organize the documents but it could cost thousands for them to do this,” says Dyke. Ask your lawyer or accountant how they’d like to see the documents, whether by year or account.
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