Op-ed: Unpacking the hidden costs of divorce – and how to prepare for them

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Love may not cost a thing, but divorce can come with a hefty price tag.

Most people considering divorce go in with the understanding that it’s going to come with a cost, but many — particularly those pursuing a contested divorce — can experience massive sticker shock when those costs begin to add up during the process.

The majority of these fees simply can’t be avoided, but understanding what to expect can help you better plan for the process. Attorney fees and court fees are a given and can run anywhere from $5,000 to $50,000-plus, depending on factors such as geographic location (divorce is generally more expensive on the coasts), whether the divorce is highly contested, the complexity of the issues, how much litigation is involved and more.

In addition to the standard fees, even the most amicable divorces tend to accumulate some add-ons. Below are some of the common-but-unexpected costs you may encounter.

Review your divorce landscape

Scenarios like these add more than emotional tension to the situation and can take extra resources to resolve. Expert witnesses, forensic accountants and psychological evaluations are all investments that may add value to your case and more, but the costs can add up, so surveying your unique landscape will help prepare you for what resources will be necessary to chart a path to the other side.

Uncovering potential hidden costs can begin with surveying the landscape of your divorce — determine who the players are, what the climate is, and who you may need to help guide the journey in addition to your attorneys.

The way in which you and your soon-to-be-ex approach your divorce will have a big impact on the final price tag. Mediation and other alternative dispute resolution strategies can save money, but they may also require compromise you aren’t necessarily considering. If you decide that bridging the divide on major financial and custodial issues isn’t possible without litigation, additional expenditures will likely arise.

If your divorce is contested or your partner isn’t cooperative, it’s important to prepare your financial mindset accordingly. Is your spouse the type to hide money or assets? Budget for some forensic accounting. Special subpoenas may be needed to ensure that bank statements and business documents, such as profit-loss statements, along with other important financial documents, are available and accounted for.

When it comes to children, if you and your spouse share similar expectations for custody, the matter can be straightforward to resolve. But if you’re not on the same page, or there are additional issues such as allegations of domestic violence involved, the services of custody experts and other evaluations may be called for.

The literal cost of moving on

You may be very eager to start the next phase of your life, separate and apart from your ex, but if you and your spouse intend to sell shared property and split the profits, it may make sense to discuss the logistics now. Dividing shared assets such as a primary or vacation home, art collections, cars or other big-ticket items requires investment on the front end — whether it’s a real estate attorney, appraisals and/or closing costs. Something as straightforward as transferring title to real property still comes with a fee.

Even without having to negotiate buying and selling a property, chances are that if one of you is keeping the property, the other is likely moving out. Moving expenses and other relocation costs such as deposits or down payments, setting up utilities, storage and more may not be on the top of your list when thinking about costs as you begin the divorce process.

Beginning to put time into researching these lesser, but still accumulating, costs can be a big help when considering the whole financial picture.

Know the tax consequences

If you’ve previously enjoyed tax savings from joint filing and/or claiming child-related tax benefits, your first “single” tax bill may be very different from what you’re used to. Many child-related tax benefits such as dependent or education credits can only be claimed by one filer, so you may want to plan ahead and address this in your settlement agreement. Without a thorough agreement, you could be left in the lurch if your ex-spouse files before you do or if there’s no clarity on how and when these benefits can be utilized.

Taxes are complex, so it may benefit you to take a collaborative approach with other professionals early in the process. Your divorce attorney can work with financial and tax advisors so you are clear on the tax implications and how you can plan ahead.

Learn to live with higher lifestyle costs

Splitting lifestyle expenses with your spouse, such as insurance, utilities and even your Netflix and Hulu subscriptions, likely resulted in cost savings. Keep in mind that when the marriage ends and your household divides, so will benefits such as family plans and multiple-car discounts. While this might seem obvious — and minor compared with other costs — the reality of paying for everything from vacations to health insurance to home appliance repairs independently often takes people by surprise.

Therapists, business coaches and life coaches can offer invaluable advice to help you find your footing in this new phase of your life, but if you plan to utilize their services, be sure to add these fees to your divorce budget. If possible, consider working with providers who offer flat rates to make your budget more predictable.

How to best prepare your budget and mindset

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The financial aspects of divorce can become less stressful when you take stock of everything before filing.

Seek professional financial guidance if you can. An extra pair of trained eyes can offer substantial benefits both for your daily budget and your new long-term financial outlook. If possible, consult with a financial planner who can offer steps to improve your money management.

If you don’t have an accountant, seek one out promptly. This is especially crucial for anyone who owns a business or manages large investments. Introducing your team to each other, so your attorney can coordinate with other professionals in your life, can make settlement negotiations, or ultimate outcomes, that much easier to navigate.

There are also many things you can do independently as you prepare to transition to a one-income household. From collecting and reviewing copies of bank statements, shared bills and other financial documents to requesting new quotes from insurance and service providers, the more organized and informed you are heading into the divorce, the more prepared you’ll feel.

Taking these steps to be proactive, rather than reactive, will help you minimize stress and stay focused on your future when unexpected costs arise.

— By Jamie Berger and Sarah Jacobs, founders of New Jersey-based matrimonial and family law firm Jacobs Berger