What You Need to Know About the Cost of Your Divorce

It’s the elephant in the room. Everyone is THINKING about it, but no one wants to TALK about it–So how much will my divorce cost???

Unless your divorce is simple, meaning no children and no assets, then no lawyer can tell you the exact cost because there are so many unpredictable variables and no two cases are the same.  If a lawyer tells you otherwise, be prepared to be disappointed later on when you find out that the lawyer was wrong.

But is that the best we can do?  Expect you to hire a lawyer without any idea of how much it will cost?  No it’s not.  And don’t accept that explanation from any lawyer.  So here’s what can be done, and make sure your lawyer does it, because not every lawyer does.

The Cost Benefit Analysis on Each Claim

Your lawyer can make sure whatever amount of money you have to spend on your divorce is money well spent.  Here’s what I mean by that.  When you file for divorce there are one, or several, separate claims that may apply to you depending on your facts and circumstances.     In each case, there’s an analysis that can be done on each claim to make sure your money is well spent.  The analysis is called, “The Cost Benefit Analysis of Each Claim.”  Whenever you and your lawyer are considering whether or not a claim is worth pursuing, after doing the cost benefit analysis, generally there are only three results to choose from.  Here are those three results:

1. A claim WORTH pursuing—the benefit (money) you get from pursuing claim is more than the legal costs and attorney fees you have to spend to get the benefit;

2. A claim NOT worth pursuing—the benefit (money) you get from pursuing the claim is equal to or less than the legal costs and attorney fees you have to spend to get the benefit; and

3. You Don’t Know—not clear from information available if claim is worth or not worth pursuing. When that’s the case, the only logical option is the incremental approach.  Your lawyer’s failure to recognize and do the incremental approach can cost you a lot of money by either going after a claim that is not worth it or failing to pursue claim that is worth it.

Example of Claim WORTH Pursuing

For example, let’s assume you file for divorce, and one of your claims is deciding the value of the marital home. You agree with your spouse to split it 60/40, 60% to you and 40% to your spouse.  Your spouse is going to keep the house, but has to pay you your 60% share.  Simple, right. Spouse pays you your share and that claim is done.  Not so fast.  60/40% of what?  You say the house is worth $600,000, but your spouse insists it’s worth only $300,000.  Sixty percent of $300,000 is just $180,000 whereas 60% of $600,000 is $360,000, $180,000 difference.  Big difference!  Get it?

Your spouse is trying rip you off by claiming the house is $300,000 less than its actual value, trying to pay you less.

Now the attorneys have to resolve this dispute.  Let’s say your attorney has to hire an expert to write a report and testify about the true value of the house.  Expert charges $1,200 for the report and $3,500 to testify, total $4,700 for the expert.  Also, you have to pay your attorney to fight for your legal rights–add another $7,200 for the attorney fee.  Your total cost, expert plus attorney fee, $11,900.  You fight it out before the judge and the judge decides true value of the house is $550,000.  Not what your expert said, but much more than your spouse’s expert.  Was it worth it?  In this case, clearly yes.  You had two options.  Option one accept 60% of your spouse’s value and lose $180,000.  Option two, fight back and get 60% of $550,000, what the judge decided, or $330,000, $150,000 more than what your spouse wanted to pay you.  You paid a total of $11,900 to get an additional $150,000, netting $138,100.

That example is just one claim.  There could be several others.  More than one home, multiple stock accounts, multiple pensions, etc.  The cost benefit analysis has to be done on each claim.  If your lawyer is not doing it, and you’ll know that by whether your lawyer is sitting down with discussing the cost benefit analysis of each claim, then you stand to lose a lot of money.

Example of Claim NOT Worth Pursuing

Take the example above, but assume that the dispute over the value of the marital home is the difference between what you claim house is worth, $600,000, and what your spouse claims the house is worth, $588,100.  Also assume that the attorney fee and cost is the same, $11,900.  In this case the attorney fee and cost to resolve the dispute is equal to the difference between what you are claiming and what your spouse is claiming.  Therefore, it’s a claim not worth pursuing.  But you can still try to negotiate by splitting the difference.

Example Incremental Approach

Let’s say you believe your spouse has stock options from the corporation where he works. We asked him to provide that information. However, either he didn’t do it or at best he provided us with incomplete information. If you’re right, and your spouse does have stock options, then it could be a significant amount of money. However, if you’re wrong, and there’s no stock options, then you wouldn’t get any money from pursuing that claim. So what to do? Here’s some of what your attorney could do to find out if your spouse has stock options:

1. interrogatories;
2. request for production of documents;
3. admissions;
4. take the husband’s deposition;
5. subpoena documents from the Corporation;
6. take the deposition of someone at the Corporation;
7. hire an expert to determine the value of the stock options.

Now, you’re going to have to pay your attorney to pursue all those options. How do you know if it’s worth it?   Your attorney could pursue just one or all of those options at the same time.  So this is what you do.  Rather than pursuing several or all the options at the same time, you pursue the least expensive one and wait until you see what you find out.  You continue to pursue the claim incrementally until either it becomes apparent that the claim is worth pursuing or it becomes apparent that the claim is not worth pursuing.

I’ve heard stories where the attorney won the case, and proudly told his client about the victory, only to find out later that the attorney fee equaled or exceeded what the client got in return.  You don’t want a lawyer like that.

All lawyers do the cost benefit analysis of each claim, right?  Nope.  It may be second nature to me because of my background with undergraduate education is in finance.  At one time I was a stock broker.  In addition to having a law firm, I also have an income tax practice catering to individuals and small businesses.  With that type of background, thinking of claims in terms of cost benefit analysis is second nature to me.  However, there are many lawyers whose undergraduate education is in English, Political Science, or some other type of non-financial major.  Therefore, it’s not necessarily second nature to them, and they may not do it, which could cost you a lot of time and money.

So maybe we can’t give you the exact cost of your divorce, but the lawyer who is all along the way looking out for your interests, doing the cost benefit analysis of each claim, can make sure your money is well spent, and you’re financially much better having hired that type of an attorney.

Want Peace of Mind and a Complete Evaluation of Your Case? 

Call (610) 347-5683 NOW or Click HERE to Schedule a Consultation with Chester County Pennsylvania Divorce & Family Law Attorney, Michaelangelo L. Dippolito.  Click HERE to see the attorney’s background.

Not Ready to Speak to an Attorney Yet?  No Problem.

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• Critical 5 Step Process to Divorce in Pennsylvania
• “Cooperating” with The Other Side Can Cost you Time and Money
• What You Need to Know About the Cost of Your Divorce
• Arming Yourself with Knowledge is the First Step to a New Beginning

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