A divorce can be a difficult process for many reasons. Not only do you have to deal with the emotional implications, but you also need to make sure that your separation process is as uncontested as possible, while also juggling the expenses of the divorce process itself. And, depending upon your individual situation, some of the costs can really add up.
Costs of Divorce
The following are estimates of the costs associated with a divorce, based on data from the US Census Bureau.
- Uncontested divorce: $11,460
- Divorce with children: $27,360
- Divorce with children and financial settlement: $39,020
Most of the fees above primarily include the cost of attorneys for both spouses.
These costs vary based on the state in which you reside and your marital status. However, they provide a general idea of how much a divorce can cost.
Legal Fees for Divorce
According to Nolo.com, the average cost for a uncontested divorce (when both parties agree) in the United States is $4,100. This fee covers both attorney fees and court costs. When parties cannot agree on a settlement, the cost of a contested divorce rises dramatically. The center reports that a contested divorce will typically cost around $25,000 on average, while a contested divorce with many disagreements that the lawyers get to fight over could run upwards of $100,000.
Many couples opt to have a mediation-only divorce where no lawyer is involved. This can save money on fees paid to lawyers, but it may not be as effective in resolving disputes or providing equitable settlement amounts.
This is why OurDivorce.com helps couples navigate an uncontested divorce agreement. Get Started for Free. Our 3-step divorce system helps walk you through discussions around assets, debts, and expenses, so that you can collaborate on an amicable agreement.
Custody and Child Support
When a marriage ends, the court will determine which parent has custody of the children. Custody is determined based on a number of factors, including the child’s age, relationship to the parents, and where the child lives. Most states have laws that establish specific guidelines for judges when awarding custody. Couples who are filing an amicable uncontested divorce can also establish their own custody and visitation schedules.
Child support is a financial obligation that one parent must pay to the other after a divorce or separation. This obligation may be in addition to or instead of custody and visitation rights.
Child support is based on a number of factors, including the income and assets of the parents, the children’s needs, and any other obligations that the parents have. Typically, child support payments last for a period of time equal to the length of the children’s primary caretaker relationship – until the child is 18, and sometimes during college.
When couples choose to have an agreed divorce settlement, decisions relating to child custody and support are made between the two spouses, letting the couple maintain more control over the desired outcomes than what they might experience letting a judge or lawyers make those decisions for them.
Costs Associated with Property Division
When couples decide to divorce, they must determine what is fair and equitable for both parties. Property division can be a difficult task, as each individual may have different desires and expectations. Costs associated with property division can vary greatly, depending on the state in which the divorce proceedings take place. In general, however, there are some common costs that couples may face.
One of the most important costs associated with property division is usually attorney fees. Lawyers can help to protect each party’s rights during divorce proceedings. Many times, attorneys will charge an initial fee or retainer, and then additional fees for their services throughout the proceedings. It is important to budget for these costs ahead of time, as they can quickly add up. If you have decided upon a mutually agreed divorce settlement, you may be able to skip paying attorneys for your divorce. There will be other legal costs, such as court costs. These fees vary widely from state to state and often depend on the amount of money involved in the dissolution.
Some marital property may incur costs due to the division process, such as real estate. When properties are divided, each spouse may be required to pay a portion of the value of the property. This can often result in financial hardship for couples who were previously able to rely on marital assets. If one spouse is selling their interest to the other, refinancing is involved, and a new property closing and the related closing costs, all of these costs can quickly add up.
Alimony or Spousal Support
Alimony or spousal support may be awarded to a spouse who has been financially dependent on the other spouse following a divorce – such as when one spouse has remained home, out of the workforce, to raise the children. This type of financial support may be paid periodic or lump sum payments. Alimony may be awarded for a specific length of time, or until the dependent spouse remarries or is no longer financially dependent on the other spouse.
Taxes on alimony payments are typically based on the payer’s income and marital status. Additionally, spousal support payments may be subject to federal and state income taxes.
The requirements related to alimony vary in every state, so you should check your local laws for more information.
Post-Divorce Issues and Costs
When a couple decides to divorce, there are many post-divorce financial issues that can arise. Some of these issues may include: child support, financial settlements, alimony, property division, and more. Each situation is unique and dependent on the individual facts of the case, so it is important to contact an experienced divorce lawyer to get an accurate estimate of what costs may be involved.
Housing usually tends to be the largest post-divorce expense for both spouses, since a home that – in most cases – used to be paid by two incomes is now only paid with one. This can mean a lot of extra expense for one or both spouses, and it’s important to have an accurate idea of what the estimated costs may be. A lengthy marriage separation can also impact costs before the divorce is final, and one of the largest areas impacted can often be housing-related costs.
Tax Implications of Divorce
There are tax implications to divorce, depending on the situation. If one spouse receives a payment from the other in the form of a settlement, that could be considered taxable income. If a spouse is ordered to pay child support, that money may also be taxable. Tax implications of any individual payments may depend upon your local jurisdiction.
Additionally, if one spouse files for bankruptcy after getting divorced, any assets he or she brought into the marriage may be subject to liquidation and taxation. In some cases, alimony payments could also become subject to taxation.
Finally, any property settlements made during divorce proceedings can have an impact on future estate taxes.
You’ll want to consult with a financial professional for help determining how your specific circumstances may impact your finances and taxes.
There are many costs associated with a divorce, but it’s important to keep in mind that these costs vary depending on the situation. By following this guide, and with both spouses working together to create an amicable settlement and mutually agreed outcome, you can ensure that you can move on with your life without any further complications.
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