Why Divorce Is So Expensive In The U.S.

Summary

This video script delves into the financial impact of divorce in the US, highlighting the significant costs associated with the process. From court fees to legal representation, the expenses can soar into hundreds of thousands of dollars, especially in contested cases. It features personal stories of individuals who have gone through divorce, emphasizing the emotional and financial toll. The script also offers advice on reducing costs, such as minimizing conflict and considering a prenuptial agreement to protect both parties' financial interests.

Takeaways

• 💰 Divorce can be financially devastating, with costs easily reaching into the hundreds of thousands of dollars, including lost income and legal fees.
• 📈 The cost of divorce varies widely based on factors such as location, presence of children, property ownership, and the complexity of the case.
• 🏠 Uncontested divorces are significantly cheaper than contested ones, with average costs ranging from $1,500 to $5,500, compared to $40,000 to $140,000 for contested cases.
• 👩‍⚖️ Involvement of professionals like lawyers, appraisers, forensic accountants, and psychologists adds to the expense, especially in contested divorces.
• 💼 DIY divorces can be a cost-saving option for uncontested cases, but even these come with court filing fees and potential oversights without legal advice.
• 📊 Post-divorce financial impacts include the need to maintain two households, changes in income, and additional living expenses that can strain budgets.
• 👨‍👧‍👦 Child custody battles can be particularly costly, with expert witnesses and legal representation driving up attorney fees.
• 💼 The economic effects of divorce are long-lasting, with women often experiencing a significant decline in financial security unless they remarry.
• 👩‍❤️‍👨 Gender disparities in income and earning potential can exacerbate financial challenges post-divorce, with women typically facing greater economic hardships.
• 🤝 Reducing conflict and agreeing on terms can help lower divorce costs, as can organizing documents and understanding one's rights before entering legal proceedings.
• 📝 Prenuptial agreements can be a proactive financial strategy, allowing couples to negotiate terms while in a loving relationship and potentially saving money in the long run.

Q & A

What is the estimated cost of a divorce in the US, considering lost income?

The estimated cost of a divorce in the US, including lost income, can easily approach $400,000, with additional expenses upwards of $100,000.

How many marriages and divorces were there in the US in 2021?

In 2021, there were roughly 2 million marriages and nearly 700,000 divorces in the US.

What factors determine the cost of a divorce?

The cost of a divorce depends on factors such as location, whether there are children involved, property ownership, disagreements between spouses, and other complexities that may require professional services.

What is the average cost of an uncontested divorce according to Elizabeth Douglas?

According to Elizabeth Douglas, an uncontested divorce costs between $1,500 and $5,500 on average.

What is the estimated cost range for a contested divorce?

A contested divorce can cost anywhere from $40,000 to $140,000, and even more if the case goes to trial.

What does an uncontested divorce mean in terms of the process?

An uncontested divorce means that the couple agrees on the terms of the divorce, making the process typically cheaper and less complex.

What was Lindsay Williams' experience with her uncontested divorces?

Lindsay Williams went through two uncontested divorces without children involved and used a DIY approach, with her first divorce costing $1,000 in 1997 and the second costing $4,000 in 2006.

What are some of the additional costs associated with a divorce apart from legal fees?

Additional costs of a divorce can include court filing fees, photocopies, notary fees, transportation, mailing and processing fees, transcription services, and software for evidence presentation.

What is the impact of a divorce on an individual's financial situation according to the script?

A divorce can significantly affect an individual's financial situation, leading to the need for a more frugal lifestyle, increased work hours, and the potential for substantial debt.

What advice does the script provide for reducing the cost of a divorce?

The script suggests reducing conflict, agreeing more, organizing all necessary documents beforehand, knowing state laws and rights, choosing a mediator or lawyer wisely, and keeping emotional discussions outside of the legal process.

What is the 'divorce gap' mentioned in the script, and how does it affect men and women differently?

The 'divorce gap' refers to the economic disparity that often occurs post-divorce, where women typically experience a significant decline in their standard of living, while men may see an income boost, on average.

What is the role of a prenup in the context of divorce costs?

A prenup can help protect both parties financially by establishing clear terms regarding property and assets division in the event of a divorce, potentially saving money and reducing disputes.

Outlines

00:00

💰 The High Cost of Divorce in the US

This paragraph discusses the financial implications of divorce in the United States, highlighting the significant costs involved. It mentions the overall expense, which can range from $150,000 to over $400,000 when including lost income. The paragraph emphasizes the variability of these costs depending on factors such as location, the presence of children, property ownership, and the level of dispute between the parties. It provides an average cost range for uncontested and contested divorces according to Elizabeth Douglas, a family law attorney, and illustrates the financial impact through the personal experiences of Lindsay Williams, who went through two low-cost, uncontested divorces, and the additional expenses incurred due to court fees, legal representation, and other related costs.

05:02

📉 Post-Divorce Financial Struggles and the 'Divorce Gap'

The second paragraph delves into the financial struggles faced by individuals post-divorce, particularly focusing on the case of John Norman, who underwent a costly custody battle resulting in substantial attorney fees and debt. It touches on the economic effects of divorce on women, referencing a study by Ken Couch that indicates divorced women often experience a significant decline in financial security, which is not fully compensated by child support or alimony. The paragraph also addresses the phenomenon known as the 'divorce gap,' where fathers may see an income boost while mothers face a drop, and notes the changing dynamics in households where women are the primary earners. It concludes with suggestions for reducing divorce costs, such as minimizing conflict and preparing well for negotiations.

10:04

🛑 Strategies for Mitigating Divorce Costs

The final paragraph offers advice on how to reduce the financial burden of divorce. It warns against the pitfalls of choosing the cheapest, potentially inadequate, DIY divorce options and emphasizes the importance of working efficiently and wisely with legal professionals. The paragraph suggests keeping emotional discussions away from costly legal consultations and recommends seeking therapy for emotional support instead. It also mentions the availability of pro bono services and financial assistance for those who cannot afford a divorce. Lastly, it promotes the idea of prenuptial agreements as a way to protect both parties' financial interests and as a practical measure when love is still present in the relationship.

Keywords

💡Divorce

Divorce refers to the legal dissolution of a marriage by a court. In the video's context, it is the central theme, illustrating the financial and emotional toll it can take on individuals. For example, the script mentions the high costs associated with divorce, such as legal fees and the loss of income, which can lead to significant financial strain.

💡Uncontested Divorce

An uncontested divorce is a type of legal separation where both parties agree to the divorce and its terms without dispute. The script highlights that uncontested divorces are generally less expensive, as seen in Lindsay's experience, where she went through two uncontested divorces for relatively lower costs.

💡Contested Divorce

A contested divorce occurs when spouses cannot agree on the terms of their separation, leading to a legal dispute. The script emphasizes the higher costs associated with contested divorces due to the need for extensive legal proceedings, as illustrated by John's experience where his divorce involved a costly custody battle.

💡Legal Fees

Legal fees are the charges for the services of a lawyer or legal team. The script underlines the significant financial burden of these fees, particularly in contested divorces, where the complexity of the case can drive up the hours and costs associated with legal representation.

💡Discovery

Discovery is the pre-trial phase in a lawsuit where parties exchange information and evidence. The script points out that discovery can be a lengthy and costly process in contested divorces, as it involves the exchange of financial records and other relevant information, which can take months or even years.

💡Custody Battle

A custody battle is a legal dispute over the guardianship and parental rights of children following a divorce. The script illustrates the financial impact of a custody battle, as seen in John's case, where the fight over the children resulted in substantial attorney fees and emotional distress.

💡Debt

Debt refers to an obligation owed by one party to another. In the context of the video, debt is a consequence of the high costs associated with divorce, as individuals like John find themselves owing significant amounts after legal fees and other divorce-related expenses.

💡Financial Security

Financial security denotes the state of being free from financial worries or fears. The script discusses how divorce can negatively impact financial security, especially for women, who may experience a decline in their standard of living and struggle to maintain their pre-divorce lifestyle.

💡Prenup

A prenup, short for prenuptial agreement, is a legal contract made before marriage that specifies the terms of property division in the event of a divorce. The script suggests that prenups can be a proactive measure to protect financial interests and potentially reduce the cost and conflict of a future divorce.

💡Forensic Accountant

A forensic accountant is a professional who specializes in investigating financial irregularities and providing expert testimony in legal disputes. The script mentions the role of forensic accountants in complex divorces, where they may be needed to trace hidden assets or analyze financial records.

💡Pro Bono

Pro bono refers to professional services provided voluntarily and without charge. The script suggests that for individuals who cannot afford the high costs of divorce, there are options such as law firms offering pro bono work or financial assistance from nonprofits and shelters.

Highlights

The cost of divorce in the US can exceed $150,000, including lost income, and reach up to $400,000.

In 2021, there were 2 million marriages and nearly 700,000 divorces in the US.

Divorce expenses vary based on location, children, property, disagreements, and other factors.

Complex divorces require more professional hours, increasing costs.

Uncontested divorces in New York average between $1500 and $5500, while contested ones range from $40,000 to $140,000.

Divorce can lead to significant financial and lifestyle changes, including the cost of maintaining two households.

Lindsay Williams went through two uncontested divorces, using a DIY approach, costing $1,000 in 1997 and $4,000 in 2006.

Court fees for uncontested divorces in New York start at $335, excluding additional lawyer and administrative costs.

Contested divorces involve higher costs due to conflict, including court filing fees, process servers, and various experts.

Discovery in a contested divorce, the exchange of information, can be lengthy and costly.

Divorce can lead to financial insecurity, especially for women, and a decrease in standard of living.

Divorced mothers may experience a 20% drop in income, while fathers may see a 25% increase on average.

Higher earners during divorce face substantial financial loss and may need to pay more for legal fees and support.

Reducing conflict and agreeing more can help lower divorce costs.

Zoe Hutzler's divorce involved significant costs for negotiations and legal disputes, even starting with mediation.

Organizing documents and understanding state laws can reduce the time and cost of divorce proceedings.

Choosing the right mediator or lawyer is crucial for an efficient and cost-effective divorce process.

Prenuptial agreements can protect both parties financially and are best negotiated while in love.

Transcripts

Not less than $150,000. With lost income,

it would easily approach $400,000 upwards of $100,000

easily. Between

$172,799 to roughly $191,000, of which I still owe 120,929.

Getting divorced in the US isn't cheap. In 2021, there were

roughly 2 million marriages and nearly 700,000 divorces. That's

a lot of people coughing up a lot of dough.

It's been four years of misery and very expensive four years of

misery. While

divorces are expensive, how expensive depends on where you

live. If you have children, if you own property, if there's

anything you and your spouse disagree on, and several other

factors.

The more complex it is, the more hours that are required hours by

the lawyers, hours by the appraisers, the business

valuators, the crypto hunters, the forensics, the forensic

accountants, the forensic psychologist. According

to Elizabeth Douglas, founding attorney and CEO of Douglas

Family Law Group in New York, an uncontested divorce costs

between $1500 and $5500 pn average and a contested divorce

anywhere from $40,000 to $140,000. If the case goes to

trial, even more.

This is Lindsay Williams, John Norman and Zoe Hutzler. Three

people who have gone through at least one divorce. They cost

various amounts but for all significantly affected their

financial circumstances. Let's start with Lindsay who got

divorced twice. Both were uncontested with no children

involved. An uncontested divorce is what it sounds like:

uncontested and it's typically a lot cheaper. A contested divorce

is when the couple can't come to an agreement. Lindsay went the

cheapest route possible, DIY.

You should pay someone to help you get divorced. You don't have

to do it a couple of times. But there are also certain counties

that have Do It Yourself programs where you can go online

and you can fill out the forms yourself. Lindsay's first

divorce in 1997 cost $1,000. Their second in 2006 was $4,000.

But after Lindsay's first husband passed, they had to pay

their ex husband's debt. Did you consult a lawyer to make sure

that was legally solid?

I didn't because I was poor. I grew up poor and the idea of

consulting a lawyer for anything was so outside of my financial,

you know, scope of understanding. No matter what

contested or not, fees can't be escaped. Court fees differ by

state but in New York, even for an uncontested divorce, filing

fees will cost you at least $335. That's not including the

cost of a lawyer, photocopies, notary fees, transportation,

mailing and processor fees, among others.

There are software you have to buy if you want to use things to

support your case like text messages and emails, I paid a

transcriber $250 for a court transcription. That gets

expensive. Then

there are contested divorces, which means more conflict and

more conflict means more money. Court

filing fees, process servers or Real Property Appraiser.

Typically there is a forensic psychologist who has a custody

issue, business valuator nowadays, so many people have

cryptocurrency so a crypto hunter a tax specialist. Douglas

says one of the most expensive parts of a contested divorce is

discovery, the formal process of exchanging information between

the parties - that can take months and even years.

Most prices get driven up when we're dealing with people who

have offshore accounts, or they're trying to hide assets or

transfers. That's where you start seeing things like

funneling money into an aunt's name a sister's name.

The more topics that need to be discussed, assets split, money

trying to maintain essentially two households, on our same

found, children that need to be planned for, all means more

hours, you're paying your lawyer for. Since John first separated

from his ex wife in 2019 he's used several ranging from $250

to $650 an hour. A divorce is a separation, a dissolution a

disassociation. And with that comes a lot of life changes -

significant ones. We're

incomes,

two houses, two electricity bills, cable, internet,

groceries, cars, rent or mortgage. And that's if you're

lucky, Lindsay was in an abusive relationship.

It was not safe to stay in the house, but I didn't have

anywhere to go. So that's when I learned how to live in a car.

There's also the cost of moving, buying new furniture, setting up

utilities, doing your taxes independently, separating your

health insurance and possibly selling the shared home or

homes. And that's just the beginning. This major life

change might cause time lost at work, the need for therapy, and

if there are children involved, more child care. And speaking of

children, there's custody to figure out. John worked in law

enforcement for more than 20 years and he was retired in

2019. When he separated from his ex wife,

we went through a completely unnecessary custody battle. It

was about $123,000 in attorneys fees, I had to hire an expert

witness. I was without my kids for a year.

Before the divorce, he says money wasn't a concern. Now, he

owes more than $120,000, nearly $40,000 of that in credit card

debt.

We had extra money and bought a boat then there was this custody

battle and it just drained all my accounts. It's gonna take me

years to recoup from that.

He says he retired in 2016, and became the primary caretaker to

his then seven and 10 year old daughters. That's while his ex

wife started her own business. So when he and his ex wife

split, all he had coming in was a pension - $3,200 a month

I was paying for groceries on our joint checking account, then

that joint checking account was emptied to an account that my

name wasn't on. So I was left with $38. And it was a difficult

spot to be in.

He worked in real estate, got a part time job at Ithaca College,

and he recently accepted a new job with Tennessee Homeland

Security as a special field agent. How are you gonna get out

of all this debt?

Working a lot, you know, living a more frugal lifestyle, I'm

gonna devote probably the vast majority of my pension to paying

down debt. I'm working with a financial analyst as well, who

is helping with that, and that's yes, by the way, that's another

expense, another $5,000 to come into a plan on how to pay down

your debt, but it's a drop in the bucket if I can effectively

erase $120,000 of debt in the next three to four years. It's

gonna be money well spent.

Ken couch is a professor at the University of Connecticut

studying the economic effects of unexpected lifecycle events. In

a long term study developed in collaboration with the Social

Security Administration, he found that divorced women lost

significant financial security unless they remarried. The

flows of child support and alimony do not make up for the

additional living costs on average. In the divorced woman's

household typically, the household of the woman and

children suffer a significant decline in their standard of

living where the typical male even after paying the child

support is doing a little bit better than he was married. He's

not the only one to discuss what many around the world call the

divorce gap. This study for one on British households by a

professor at the London School of Economics claims fathers see

an income boost of about 25% After getting divorced on

average, while mothers experience a 20% drop. It's

important to remember that women earn 82 cents for every dollar a

man earns. However, something that we all know has changed in

recent decades is who makes more money. It's much more common now

for women to be the breadwinner. And of course, not all divorces

involve a man and a woman. Well, studies do show that in the long

term, women end up with a decline in their standard of

living higher earners do experience substantial financial

loss, at least during the divorce. If you're

the monied spouse, you're probably going to pay more

because you're contributing a portion towards the other

spouse's council fees. Likely you are trying to maintain the

status quo. So you're probably paying child support, you're

probably paying maintenance all while trying to maintain a home

or a new lifestyle of your own.

So how can Americans reduce their costs?

Fight less, agree more. Take the emotion to the extent you can

out of it. Even when you have lots of assets to protect when

you are fighting about everything where everything has

to be your way or the highway, it's going to cost you more.

To prevent her divorce from being a huge financial burden on

both her and her ex husband, Zoe Hutzler, who has a seven year

old son worked with a friend of hers who was an attorney to

craft a custody agreement.

We didn't have a humongous estate, the tough part for us

was custody. I thought that would really reduce the amount

of time we would spend with our lawyers. Unfortunately, my ex

husband didn't think so. Like John's,

Zoe's divorce started with mediation, but they were going

nowhere and got lawyers in 2022. She says one argument alone

about picking up and dropping off her son cost her $4,000. I

mean, I literally would text him on the side and say, Do you

realize how much this fight is costing us? This is ridiculous.

Can't we be adults can't we just have this conversation? But when

somebody else engages their lawyer, you have no choice but

then to engage back with your lawyer.

The money I've spent on things that have vaporized and never

come to fruition. We spent three weeks in negotiations, spending

money on our attorneys to negotiate the duration of

gymnastics and how it would unfold and who would be taking

and then the kid doesn't want to do gymnastics.

While it might be easier said than done, there are steps

Americans can take to keep costs down. Get yourself organized.

Gather all the documents you might need like tax returns,

employment contracts and real estate documents. Know your

state laws and especially know your rights. The more work you

do up front, the less time you'll be paying someone else to

do it for you, and choose your mediator or lawyer wisely.

You get what you pay for. The cheapest, cheapest, cheapest way

is do it yourself or, you know, you see those signs all the

time, a divorce $399. It's like getting a happy meal right as

opposed to the real deal. But if you do that, then you have to be

prepared to deal with those results, which might be waiting

longer, getting papers bounced back and getting it done wrong. At

the same time. Spend your time with your lawyer wisely. Your

divorce lawyer should not be your best friend, also the most

expensive friend you can have. Keep

the explaining complaining and venting for your trusted loved

ones. And not someone with a several hundred dollar hourly

rate. A therapist might be a good idea too, and certainly a

cheaper one. There are also options for those who don't have

enough money to get divorced - law firms that do pro bono work,

offer financial assistance, and there are many organizations,

nonprofits and shelters

that can help too. You don't have to stay married to someone

just because you don't have the money. And finally, for

those who aren't in this situation quite yet, consider a

prenup. The best

piece of advice I can give anybody is you are never going

to negotiate a more favorable divorce for both parties than

when you love each other.

Prenups are romantic. You get to protect someone while you still

love them before you hate them. And you get to divide and save

money for both of you early on. I think there's some people who

stay married because they're afraid that their lifestyle

won't be able to be maintained. Or they still believe that old

adage it's cheaper to keep her. I say no it's not. It's not

cheaper because you can't get that cost back