- Do your own copying. Disclosure of financial information is very paper-intensive, and everyone needs copies of everything. Your attorney must bill you for the time staff spends making copies of your paperwork. Set aside a couple of hours to spend at a copy center (these vary widely in price and hours), and make three copies of everything: one for your attorney, one for planner, and one for yourself (which you may eventually provide to your spouse or their counsel).
- Use alternative dispute resolution. Mediation is a means of taking control of your own divorce. If you and your spouse are able to work together, even indirectly,
mediation can be a non-adversarial means of deciding the outcome of your divorce. Who knows your needs better than you do? Who is better able to determine a parenting schedule? Often the future is smoother (especially when kids are involved) if the divorce does not become a pitched battle.
If working with your spouse through a facilitator is uncomfortable for you, another potential method is Collaborative Divorce, in which both parties and their specially trained attorneys work together (often with Financial Planners, parent coordinators and other experts) to create a settlement in which each party is represented, but the object of everyone at the table is to create a settlement in a non-adversarial climate.
- Educate yourself. Initial Consultation. In your first meeting with your attorney or financial planner, you will learn a great deal about two important things: What you face as you move ahead in the divorce process, and who is this individual with whom you will be intimately involved over the course of the next several months to several years. Initial consultations should be very informative and worthwhile.
To maximize the benefit of time spent with your professionals, it is also important to bring yourself up to speed on the process, and on finances. The court financial forms help you to better understand what it really costs you to live, month by month. Take a class. The newspaper has mortgage rate information. There are some very good books on the subject of divorce which will help you to become familiar with your lawyer’s vocabulary and with the process, so you feel like the important member of your team which, of course, you are.
- Understand the billable hour. The tendency to contact your attorney with every question as it arises is great, and easy to understand. The more organized you are when you speak or meet with your attorney, the less of his or her expensive time you will take in conversation and paper shuffling Also, being in touch by e-mail or Fax allows your attorney to efficiently work with you, addressing your question at a time when he can focus on your case, rather than shifting gears by spontaneously taking your call when he is focused on another project.
- Let your spouse pay the filing fee. As a matter of ego, there is a tendency to want to be the one who files for divorce. As a practical matter, there are costs involved in filing (lawyer’s time, court costs), which might be borne by your spouse more easily.
- Sell the house. This is a hard one. Often the house is one of a couple’s greatest assets, and greatest expenses. If, in the property split, you get the house, you have to keep up not only the mortgage, but also all the ancillary maintenance expenses. Likely you will have to refinance to get your spouse’s name off the mortgage, which involves fees. If you find a year later that the house is more than you can handle and decide to sell then, the cost of selling the house will likely approach 8%, between commissions and selling concessions. That 8% comes out of your pocket, as do any taxes on appreciation beyond $250,000.
Also, you will not have amortized your refinancing, and it will set you back a couple thousand dollars. If you sell the house pre-divorce, you share the selling expenses, generate cash for a down payment on a new home, and can absorb up to $500,000 in gain tax free.
- Appraise the pension plans. Some retirement plans, like an IRA or 401-k, are a lump of money, easily valued and easily distributed. Your interest in your spouse’s pension may or may not be 50%. Some retirement plans have vesting schedules, or defined benefits (at age 65 you will receive $5000 per month for life). The value of the pension, and of your interest in the pension, need to be determined so you can understand how much money you have going forward. The values are often surprising.
- Get a good lawyer. Often, clients who are confused about how to choose a lawyer will make a decision based on hourly rate. An expensive lawyer may end up as a more cost effective choice if he helps you get a better settlement or uses fewer hours. The inexpensive attorney’s rates may just be reflective of her costs (suburban vs. downtown?). Your friend’s “killer” lawyer may not be a comfortable fit for you and your situation. Be certain that your attorney works in Family Law. If you have special issues (foreign spouse, disability), see that he or she has some expertise in this area, as well. Friends, your local Bar Association, other professionals (your accountant, attorney, therapist or Financial Planner) may be able to provide you with some names.
- Check your bills. Has there been some aggressive spending post-separation? Is your spouse generating expenses, which should not be your responsibility? Does Fifi really need a grooming every month? Your bills are very telling about your – and your spouse’s – expenses and lifestyle. They will help you understand what you might need to cut back on if separation and divorce do not leave you with enough income to cover every expense. They will also show you your spouse’s expenditures, some of which might be difficult to justify as reasonable expenses going forward. Bills are a good reality check.
Twenty-One Ways To Save Money On Your Divorce
By Cathy Meyer, About.com Guide
Keep Down the Expense of Divorce
Finances and Divorce
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