The Tampa Bay Times ran an incredibly insightful story a few years ago on the risk of having high costs of divorce.
The story is about a relatively well-off couple that could not come to an agreement on their divorce, so they wound up having a trial. That means each spouse had their own attorney, and each attorney was being paid out of the couple’s shared assets. The result was not pretty.
A trial is the worst case scenario for most couples
Sadly, most couples have very little to split up so there is almost zero chance of going to a trial because neither spouse can afford a lawyer.
On the other hand, it often makes sense for very rich people to go to trial. For example, the multi-millionaire founder of Cancer Treatment Centers of America, Richard Stephenson, recently completed a divorce trial. His wife was seeking alimony of $5 million per year ($400,000 per month) to maintain the lifestyle she was used to, on top of an upfront payment.
After ta rial, the judge ordered him to pay $55,000 per month. In other words, he saved about $4.3 million per year. His legal fees were probably worth it.
On the other hand, the couple in the Tampa Bay Times story lost most of their money to lawyers. The husband refused to pay temporary support to the wife, so her lawyers forced him to. When he said he had no money, the wife hired a forensic accountant to find his money. At one point a judge ordered the husband to give his estranged wife $120 out of his pocket.
In just the first year, the wife paid $92,236.85 in fees and the husband paid $54,234.40. The case ultimately went on for five years, though four judges, six lawyers, and $400,000 in fees all to essentially bankrupt the couple and result in monthly payments of about $1,000.
There are many options for controlling the cost of divorce
Most divorces in America today are no-fault, meaning that the couple simply has to ask to go their separate ways. Nobody has to prove anything. The disputes that need to be settled involve money and children.
The best thing a couple can do to control the costs of divorce is to settle these disputes themselves.
If a couple agrees on how to split their assets and share custody of their children, they can often get divorced on their own for as little as $500.
Another cost-saving option for those who are looking controlling the cost of divorce is, for a couple to jointly hire a lawyer that can walk the couple through the process together. Sometimes the couple might be unable to agree on divorce terms themselves but could do it with just a little help.
A lawyer can sometimes be a deal maker. In other situations, the couple can hire a mediator who facilitates the spouses coming to an agreement. Another option is an arbitrator that will hear arguments from both sides in sort of an informal trial that is much less costly than an actual court trial.