How Much Does Divorce Cost?

Patrick Horning is an attorney in Sophisticated Planning Strategies at Northwestern Mutual.

Getting divorced is a major life change that may uproot your personal life—and your money, too. As you work through the process, one question may loom large: How much does a divorce cost?

The answer isn’t so simple. Every divorce is different, and the amount you spend will ultimately depend on your unique situation. Legal Zoom puts the cost range of the legal aspects from $500 to $11,000 or more. Let’s look at the factors that affect the cost of a divorce, along with other important financial implications.

Factors that affect divorce costs

Most people getting divorced hire a lawyer, and that’s where the biggest expense comes in. A couple who agree on most things and want to reach the finish line swiftly will likely spend less than a couple who struggle to find common ground. If the case goes to trial, your costs will likely rise significantly. Beyond that, the amount you spend from start to finish will depend largely on the following factors.

The state you live in

Every state has its own divorce filing fees and laws around property distribution, child custody, child support and alimony. Legal fees can also vary widely from one state to the next.

An important factor is whether you live in a community property state or a common law state. This will determine how marital property—your home, joint accounts, vehicles, retirement accounts and more—is divided.

Community property states: Each spouse generally owns half of all assets and debts acquired during the marriage. Community property is generally divided equally between both parties. As of this writing, there are 10 community property states: Alaska (optional), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Common law states: The judge may use their discretion and divide all marital property in a way that seems fair to both parties. That may or may not reflect a 50/50 split.

Contested vs. uncontested divorces

If you and your spouse agree on all major issues, it’s possible to draw up an agreement and move forward with minimal costs. This is considered an uncontested divorce, and it allows you to minimize legal fees. Together, you can decide how you want to split up marital property and co-parent any children. It might even be possible to avoid legal fees by filing “pro se” if both parties agree on everything.

A contested divorce can cost more and often results in a longer process. This happens when the couple cannot agree on key issues. Attorneys are typically brought in to settle disputes and manage back-and-forth negotiations. These billable hours can add up fast, especially if you have to go to trial.

Fault vs. no-fault divorces

Some states allow the person filing for divorce to label it as “fault” or “no-fault.” In a no-fault divorce, one spouse files for divorce without having to prove that the other person did something wrong that caused the marriage to end. In these states, you might just cite “irreconcilable differences” as the grounds for divorce. No-fault divorces can be faster and less expensive.

But things could be different if your state allows fault-based divorces. In these states, a spouse who can prove wrongdoing may be awarded more alimony or marital property. Grounds for an at-fault divorce could include adultery or domestic violence.

If young children are involved

If you have minor children together, you’ll need to agree on a time-sharing schedule and parenting plan. Child support might also come into play. Laws and guidelines vary by state, which means that where you live could influence how child support is calculated. The primary caregiver (also known as the custodial parent) is often the one who receives child support. The final decision will probably come down to your custody arrangement and each parent’s earnings. Child support typically ends when the youngest child reaches the age of majority.

If spousal support plays a role

Alimony, which is also called spousal support, is money that one spouse regularly pays the other after a divorce. Whether you’ll owe or receive alimony will depend on each spouse’s income, debts and standard of living. How long you were married may also be a factor. The duration of alimony is decided on a case-by-case basis.

Other financial implications of getting divorced

Once everything is signed and the lawyers are paid, the financial implications aren’t over. It’s a safe bet that your financial life will change after the divorce. Here’s what that might look like.

The effects of divorce on retirement savings and Social Security

Divorce can affect your retirement in a big way. If you and your spouse have retirement accounts like 401(k)s and IRAs, your agreement will specify how these assets will be split. Ideally, you’ll keep an equitable portion, but you may have to play catch-up after your divorce is finalized. That might involve one or more of the following:

• Increasing your retirement contributions, especially if you qualify for an employer match
• Opening a new IRA to benefit from tax-deferred or tax-free growth
• Making catch-up contributions to tax-advantaged accounts (if you’re 50 or older)

Social Security is another factor. If you were married for at least 10 years, you might be able to claim Social Security based on your spouse’s record. That could translate to a monthly payment of up to 50 percent of their full retirement age benefit, though you’ll have to meet certain requirements.

Selling a home or refinancing a mortgage during divorce

If you own a home together, you’ll need to decide how to move forward with the property. You might choose to:

• Sell the home and split the proceeds.
• Pay your spouse a lump sum in exchange for their share of home equity, then remain in the house.
• Transfer ownership by allowing your spouse to buy out your portion and keep the home.

Be cautious here because if one spouse’s name is removed from the title, the mortgage may be “called” by the lender. In that case a new mortgage is needed (unless you’re paying with cash). The new mortgage may be at a different interest rate—and a higher interest rate might cost you a lot over the life of the loan.

Of course, if you’re leaving your home, then you’ll need to find a new place to live, which has costs of its own. If you’re buying a new property, you’ll need to cover your down payment and closing costs. If you decide to stay in your home and refinance, you’ll usually pay upfront expenses.

The effects of divorce on your taxes

Here are some important ways that divorce affects your taxes:

• Filing your taxes as a single person, as opposed to a married couple, will result in a smaller standard deduction.
• It could impact your eligibility for certain tax credits and deductions.
• Your tax bracket might change, for better or worse. If you were the higher earner in the marriage, a divorce could push you into a higher tax bracket. The opposite may also be true.

If your divorce was finalized after 2018, alimony is not subject to income taxes—and the person paying alimony cannot deduct those payments from their taxable income. The same goes for child support payments.

Using COBRA health insurance after divorce

If you’re on your spouse’s health insurance policy, you’ll probably lose your coverage after you’re divorced. You’ll have a few options at that point:

• Enroll in COBRA health insurance. This is usually more expensive but can prevent a disruption in coverage.
• See if your employer offers health insurance.
• Look for a new job that provides health benefits.
• Purchase a new health insurance plan through HealthCare.gov.

Costs of mental health care

Getting divorced can take a toll on your mental health—and it may be helpful to seek therapy for you and your children. The average cost of therapy is $100 to $200 per session, but it could be higher. Check into whether your employer provides any benefits related to mental health costs.

How to save money during a divorce

Getting divorced can be costly, but there may be ways to bring down your total spend.

Prenuptial and postnuptial agreements

It may not be the most romantic topic, but getting a prenuptial agreement (or “prenup”) can help minimize expenses if things don’t go as planned. The agreement will outline how assets and debts are to be divided in the event of a divorce. A postnuptial agreement, which is adopted after you’re married, can serve the same purpose.

Legal separation

Legal separation could be a useful option for couples who need time apart to work on their relationship or for those who have religious or personal reasons for not wanting to divorce. This isn’t an option in all states, but where it’s offered, it might cost less than a divorce. You and your spouse typically live apart but remain legally married. Usually, you follow a separation agreement that outlines issues such as property division, spousal support and child custody. You can share custody of children and continue using each other’s health benefits.

The main downside is that you cannot legally remarry unless you get divorced. You’ll also have to file your taxes as either married filing jointly or a married filing separately. This can affect various aspects of your tax returns, such as standard deductions, tax brackets, and eligibility for certain credits and deductions. Talk with a tax professional to understand the specifics.

Divorce mediation

This involves working with a neutral third party who can help you and your spouse come to an agreement. The mediator may help create a less hostile environment for negotiations and may also help resolve disputes without going to court. That could help prevent a contested divorce and keep expenses down.

Shop around for lower attorney fees

Choosing your divorce attorney is an important decision. The right lawyer is someone who has a good track record and positive reviews. Ask friends and family to see if you can get a recommendation. It’s also wise to compare payment terms before entering into an agreement. Many divorce lawyers require an upfront fee known as a retainer, a lump sum that covers initial costs and serves as a deposit against future legal fees. After the retainer is depleted, lawyers often continue to bill at an hourly rate.

Another billing practice is a flat fee—which is more likely in uncontested divorces. A preset amount covers the entire process, regardless of the hours involved.

And you may not even need a lawyer. In a “pro se” divorce, one or both parties handle the legal proceedings on their own. A pro se divorce can be either contested or uncontested. If it’s uncontested, it may be easier to manage without legal representation. If you’re considering this route, check into the specifics for your jurisdiction and think carefully about whether it’s best in the long term.

Bring in a financial professional

Getting divorced can significantly affect your financial life for years to come. The right support can reduce the stress of the financial challenges. Talking with your Northwestern Mutual financial advisor can help you navigate the short-term impact and adjust your long-term plans. With the right guidance, you can hopefully recover swiftly and build a strong financial future.

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