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Divorce and Finances

Financial focus during divorce

Divorce is not only costly in the short-run, but it can have a long-term financial impact if you're not careful. Focus on the fundamentals to stay on track.

Divorce is a complex affair, both emotionally and financially. While it's true that no two divorces are exactly alike, there are some things you can do to smooth the financial road before you. 

How much does a divorce cost?

It depends on which divorce. There's quite a broad range of possible price tags. According to FactSlides.com, the most expensive divorce in the world was estimated at $2.5 billion. On the other end of the spectrum, LegalZoom says that an extremely inexpensive divorce could cost as little as $500.

Divorces can run somewhere to the tune of $15,000 to $20,000 for most couples. Expenses most commonly include:

  • Attorney fees
  • Court costs
  • Parent education class tuition
  • Early neutral evaluations fees
  • Mediation costs
  • Refinancing costs for your home (if you own)
  • Record deed fees for your home (if you own)

Six essential money tips to help you financially survive a divorce:

  1. Seek financial advice.
    If your spouse is the money-manager in your household, you'll need to build some skills before going it alone. Even if you're the one crunching numbers, the financial complexities of a divorce are likely greater than you'd expect. Meet with a financial advisor before you file, or as soon as possible if you've already begun.
  2. Take stock of your assets.
    Find out how much cash you have on hand, in savings, invested and tied up in equity. Note, all your loans and debts, as well as the bills you pay and the income that you and your spouse receive.
  3. Be frugal.
    This is a time to squirrel away as much money as you can. Save, don't spend. The cash you build up now will help pay your attorney's fees later.
  4. Recall whose name is attached to what.
    Whose name is on the title of your car? Are you both listed on your loans? Have you named your spouse as a beneficiary in your will or on your life insurance policy? Gather all of the paperwork you have, and make copies.
  5. Prepare to sacrifice.
    You probably won't come out of this with everything you hope to keep, so prioritize what's most important to you, be fair about it, and choose your battles selectively. Accept that your standard of living is likely to change. While you won't necessarily be starting from scratch, you will be starting over.
  6. Agree to work together.
    Perhaps the most important way to protect your finances during a divorce is to play nice. If you and your spouse can agree to cooperate as you disentangle your estates, your divorce will cost much less overall, and you'll both be better off.
  7. For more divorce money tips, visit the post-divorce finances section of our learning center.

 

 

WEB.1676.07.15

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

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