Divorce has a reputation for breaking the bank – and for good reason. Myriad expenses are involved, which may increase if your divorce is contested, such as if you're arguing over who gets the family business or custody of the children. Although there are ways to keep expenditures under control, you might begin to feel as though someone is asking you to produce your checkbook at every turn.
Beginning the Divorce
Unless you suffer real financial hardship, you can't even file for divorce without paying the filing fee. States charge filing fees when you submit your complaint or petition for divorce to the court, sometimes in excess of $200. Most states will waive these fees if you're indigent, but only if your income is below a certain level. After you file for divorce, you must have your spouse served with a copy of your paperwork. This might cost you nothing if your state allows her to simply sign an acknowledgment that she received the documents from you. Otherwise – or if she won't sign an acknowledgment – you must generally pay the local sheriff or a private process server to hand-deliver your divorce papers.
By far, the most significant chunk of your divorce budget will probably go to your attorney, if you decide to use one. The more contentious your case is, the more likely it becomes that you'll need the help of a lawyer to make sure it's handled right. Some lawyers will charge you a flat fee, particularly if you're retaining them for an uncontested matter. If you and your spouse are battling over everything from ownership of the sofa to custody of the dog, however, an attorney will most likely bill you by the hour. He'll want to be compensated for every increment of time he must invest in your case. This usually involves putting down a retainer fee, and the lawyer will then bill his services against the deposit. When and if your retainer runs out, you may be asked to make another deposit, or your attorney might agree to bill you monthly until your case is over.
All The Extras
Financing a contested divorce usually involves a lot of extra fees -- and there may be a few unanticipated expenditures even if you and your spouse reach a marital settlement agreement. For example, if you own a home and one of you wants to keep it, you may have to pay an appraiser to give you its fair market value. If custody is contested, you may have to pay for a custody evaluation, and these can run to several thousand dollars. The court might appoint a guardian ad litem to look after the best interests of your children, and divorcing parents pay for this expense as well. If alimony is at stake, you might want a vocational evaluation to determine how much your spouse is capable of earning without your financial assistance. Your lawyer may want to depose your spouse or one or more of her witnesses. If so, you'll have to pay a court reporter to take the testimony down verbatim. There's usually no rule against you and your spouse sharing the expense of neutral expert witnesses, such as an appraiser or an accountant to value your business, but if you hire your own, he's on your side – not your spouse's.
When the Divorce Is Over
Your marriage may be officially over when the divorce is final, but you can probably anticipate a few more expenditures as you tie up loose ends. For example, if you're dividing retirement benefits, this usually requires a qualified domestic relations order, or QDRO. By law, your retirement plan administrator cannot divert a portion of the asset to your ex without a QDRO. This is a complex document that usually requires an expert to draw up, and it can't be accomplished until your divorce is final. Your decree must order the retirement plan division before a QDRO can be drafted and implemented.