Divorce can be a difficult process, particularly when you and your spouse disagree over how to divide your property and other assets. The same is true if you can’t agree who will pay off debts you owe together. In order to understand the impact of disputes over property and debts on the divorce process—including how much it costs and how long it takes—we conducted a survey of readers who had recently gone through a divorce. Here’s what we learned.
How Property Division Issues Affect the Cost of Divorce
In our survey, just over half (52%) of our readers told us they had disagreements with their spouses about how to divide assets they owned together (regardless of any other disputes in their divorce). That doesn’t mean the rest of the readers didn’t own any property with their spouses—just that their divorces didn’t involve disputes over the division of property. If you and your spouse can agree at the outset about how to split up simple items like furniture, cars, and electronic devices, you can save yourselves time and money in the divorce. Of course, that may not be so easy when you’re dealing with valuable or complicated assets like the family home or a business (more on that below)—or even emotional issues like who gets the family pet after the divorce.
So it’s not surprising that the vast majority (78%) of readers with property disputes hired a divorce lawyer to help them resolves those issues. Those readers paid an average of $13,900 for their divorce attorneys’ fees and $2,000 in other costs (not including their spouses’ share of those expenses). If the total—just under $16,000—sounds like a lot, it may help to remember that a relatively small group of people with particularly high costs can drive up the average. More typical is the median amount (meaning the midpoint where half paid less and half paid more). In our survey, the median total divorce cost for readers with property disputes was $10,500. About a quarter (24%) paid as little as $5,000 or less, while 15% paid as much as $30,000—or more.
Your divorce costs will depend on several different factors, including:
- The type and amount of your assets. Usually, the bigger your marital estate (all of the jointly owned assets), the more you’ll have to pay to divide it. If you and your spouse have a high net worth—with numerous brokerage accounts, retirement accounts, real estate portfolios, and venture capital interests—you’ll need to get careful legal and financial analyses from attorneys and specialized experts to make sure the assets are assigned the proper value and your interests are protected. Dividing these types of assets will have major tax implications, so it’s crucial to have a knowledgeable CPA on board as well. But even if your marital estate is modest, you might have assets like pensions that call for expert assistance to determine how much they’re worth and how they should be divided.
- Other disputes in your divorce. The figures discussed above are for all readers with property disputes, regardless of any other contested issues in their divorce cases. Your costs are likely to be on the lower end of the spectrum if you don’t have any other disputes but higher if you do (more on that below).
- Legal representation. If you hire a consulting attorney to help with just part of the divorce process—like reviewing a draft settlement agreement—you’ll usually pay considerably less in attorneys’ fees than if you hire a “full-scope” attorney to handle the entire case from start to finish. Clearly, using a consulting attorney isn’t for everyone; only 10% of our readers went that route. But those who did paid an average of only $6,500 in attorneys’ fees.
- Your lawyer’s hourly rate. Divorce lawyers almost always bill by the hour, and those hourly rates can vary a lot depending on their experience, specialized training, and where they work (as shown in our report on hourly rates charged by family law attorneys across the country).
- Settlement or trial. If you and your spouse take a long time to compromise on a settlement agreement, you’ll end up paying for more of your lawyer’s time. But if you can’t reach an agreement at all—and have to go to trial to resolve your divorce disputes—your costs will rise even more (see below to see just how much).
How Going to Trial Affects the Cost and Duration of Divorce With Property Disputes
Two-thirds (66%) of our readers who had property disputes were able to negotiate with their spouses and reach a settlement agreement (generally with the help of their attorneys and/or divorce mediation). And that’s a good thing, because our survey showed that couples can save a lot of time and money by avoiding a divorce trial. Readers who settled their property-division issues had total average costs of $12,600 (including attorneys’ fees), compared to $22,100 for those who went to trial. Going to trial also meant the divorce process took longer—an average of 20 months compared to 13 months for those who settled their property issues.
When Divorces Involve Both Property and Debt Disputes
In addition to property disputes, many divorcing couples also have trouble working out who will be responsible for paying off debts they owe together. In fact, nearly three-quarters (72%) of the readers in our survey with property disputes also disagreed with their spouses over the division of debts.
As with property, state law determines how debts should be divided between divorcing spouses. And the two issues often go hand in hand—for instance, when one spouse gets the family home in the divorce, that spouse usually assumes responsibility for paying off the mortgage.
How a Dispute Over the Family Home Affects Divorce
When you and your spouse own a house together, dividing the property can get complicated. First, you’ll need to consider when you bought the house, with whose money, and whether the home gained value during marriage. You'll need to get your house appraised or look at recent, comparable sales in your area and factor in the remaining debt.
Second, you'll need to decide what will happen to the house after the divorce. Sometimes one spouse can afford to buy the other out. Or a couple might agree that the primary caregiver can live in the home until the children are grown. Some divorced couples with joint custody of their children work out an alternative “nesting” arrangement, under which the parents take turns between the family home and an apartment, so the kids can stay put rather than moving back and forth. In both of those situations, however, the divorced couples will need to figure out how to split maintenance costs, the mortgage, property taxes, and property-related tax deductions at the end of each year. To avoid these headaches, some divorcing couples simply sell the home and divide the profits.
Whichever option you take, a dispute over the family home can cost money in your divorce. You’ll need to pay for financial experts, and it will take more of your attorney’s time to work out a settlement (and even more if you go to trial). In our survey, the readers who owned a home with their spouses (about three-quarters of all those with property disputes) had total average divorce costs of $16,600, including attorneys’ fees. In comparison, those who didn’t own a house but had other property disputes spent an average of $12,600.
How a Dispute Over the Family Business Affects the Cost of Divorce
If you and your spouse own a business together, that could complicate the division of your property. Dividing business assets in a divorce involves legal and financial questions of who owns the business, what it’s worth, and what will happen to the business after the divorce. Answering those questions will usually require advice from business valuation experts and CPAs, as well as your attorney’s time. So it’s not surprising that in our survey, readers whose property disputes included a family business had higher average divorce costs ($17,500, including attorneys’ fees) than those who didn't have a business ($15,200).
How Do Other Disputes Affect the Cost and Duration of Divorce With Property/Debt Issues?
Naturally, couples who disagree about dividing their property often have other contested issues in their divorce, such as disputes over custody of their children, child support, and alimony. Not surprisingly, those disputes can increase their divorce costs, particularly if they go to trial. In our survey, readers who had property dispute plus at least two other contested issues spent an average $24,900 (including attorneys’ fees) if they went to trial on at least one issue—and even more if they took multiple disputes to trial.
How Do Property Disputes Affect the Divorce Experience?
When we asked readers how they felt about their divorce experience, their answers revealed that property disputes can make the process more difficult. Those who didn’t have a disagreement about property were about twice as likely to be satisfied with the outcome of their cases as those who had these contested issues (61% versus 31%). In addition, 83% of readers with property disputes described the process of resolving those disputes as difficult or very difficult.
If you disagree with your spouse about splitting up your assets or debts, these results should tell you that it’s particularly crucial to find a good family law attorney who can guide you through these complicated issues, help find the right financial and tax experts when that’s necessary, and make sure that your rights are protected.