Why does divorce cost so much?
Recently, a reporter interviewed me for an article. She met a person whose divorce took seven years to complete and cost well over $150,000. She wanted to know why divorces cost so much and take so long. Here's what I told her.
First, I shared one person's perspective on an "average" divorce. While some divorces can take as long and cost as much as the one she described, that is rare. I quoted Judge Michele Lowrance's data (see my previous post on her book): The average divorce takes two years and costs about $30,000. So the person she met was not average, not even close. Then I explained Collaborative Practice and my non-adversarial approach. Quoting the International Academy of Collaborative Professionals, the average reported collaborative divorce costs about $24,000 and usually finishes within 6 to 12 months. Their statistics also show a much greater range based on several factors.
With so much variability, what can a person realistically expect? In my opinion, there are three major factors that impact the length of time and the cost to complete a divorce: Complexity of the issues, values of the parties, and communication styles. These factors have to be considered individually, but they are also intertwined with one another. For example, you can have a complex situation, but if everyone is on the same page when it comes to values, it is less costly in terms of dollars and time to come to agreement.
Complexity of Issues
Bottom line, a case with complex issues costs more than a simple case. What do I mean by complex issues? Financial complexity and social-emotional complexity. Examples include recent loss of income and a home with more debt than equity. Other complex issues arise when the major breadwinner owns a business and supports the family through self-employment income.
If the major breadwinner owns a business and supports the family through self-employment income, the divorce will cost more than if that same person bring in income as a W-2 wage earner. Why? Because decisions need to be made with full information. When earned income comes from an independent third party, for example, XYZ Corporation, the spouse and the attorneys know that the number is good. If a person is self-employed, extra time and money must be spent confirming that the income reported is, in fact, the true income. The spouse will need extra education to understand the risk associated with self-employment income. In addition, the issue of whether or not to value the business must be explored and resolved. This costs money.
Complex social-emotional issues include mental illness, addictive behavior, physical and/or mental abuse, children with disabilities, and infidelity.
Values of the Parties
One year, I had four divorces all start within a week of each other with similar facts - length of marriage in each case ranged from 12 to 16 years; minor children were between the ages of 8 and 12; stay-at-home moms; dads who were in relatively high-paying jobs earning a base salary plus incentive pay; high net worth; and moms who initiated the divorce. Substantively, the complexity of the issues were the same in all cases. Two of the cases finished in about 6 months; two cases finished in 9 months. The difference in the cases: The values of the parties and their communication styles.
In the cases that finished quickly, mom and dad had similar values about how the kids were going to be raised. In one case, a goal both mom and dad shared: mom would stay home and dad would pay support to equalize income and would live close the marital home so he could stay involved in the kids’ lives. In the other case, both the mom and dad agreed mom could go back to work and dad would scale back on work to be more involved in child care. Both families agreed on educational goals for the kids—one family committed to private education and how it would be paid for. The other family wrestled with switching schools to save money and ultimately – together – deciding on how to manage day care once the mom went back to work.
In the families where the divorce took longer (though still under a year), mom and dad had values that did not line up well. They did not share a common sense of when mom would go back to work or how the kids would be cared for if and when she did. In another case, the parties did not agree on when to put the marital home up for sale (which everyone agreed was a necessary step to create viable financial futures for the family). In these cases, the collaborative professionals worked hard to find common goals. Both sides had to stop calling themselves “right” and the other person “wrong.” They were just different. The cost of the process rises because additional time must be spent to explore the parties’ goals and to work to find a solution that both will accept.
My next post will go into the issue of "communication style." There are other factors I may have missed. What has been your experience? What other factors have you found play into the cost? I'd love to hear from you on this topic.