Why is divorce so expensive?
With over half of relationships ending in divorce, the separation industry is flourishing in Australia.
Media sources estimate the average cost to separate from your partner ranges from between $20,000 to $60,000 each. For most people, this cost represents a large proportion of their net wealth that they have worked hard to accumulate.
The following factors contribute to the relatively huge cost to separate these days:
- The incorrect belief that you need to use a lawyer to separate.
- People are generally wealthier, so they have access to funds to spend on lawyers.
- People are living longer, so it is important to retain as much wealth as reasonably possible.
- The divorce process can be complex and involve many experts if you let it (see below).
- Universities are pumping out lawyers every year. Many end up in family law as it is a growing industry. To keep their jobs they need to sell their hours to clients.
The following is a list of some of the experts that may be engaged by you/your lawyer, as part of the separation process:
- Family Lawyer
- Independent Children’s Lawyer
- Child psychologists
- Barrister (if you go to court)
- Tax Accountant
- Independent valuers for:
- Superannuation funds (if they are defined benefit funds)
Each of these experts needs to familiarise themselves with your circumstances and provide their written position which may be tested in court. Many times both parties engage these experts. The costs can get very high very quickly.
Divorce does not need to be expensive. The key to retaining as much wealth between the two parties is to:
1 Cooperate. Whether you like it or not, you are in this situation together and the only way for you both to move on in a cost effective manner is to cooperate. If you cannot do this, then prepare to pay more and retain less.
2 Acknowledge every dollar both parties spend on determining who gets what is not available to be split, so the pool of available funds shrinks.
3 Understand the approximate pool of wealth you are looking to divide.
4 Quantify how far apart you both are in terms of dollars, not percentages.
5 Understand the real cost of engaging two sets of lawyers, and their experts, to fight in your respective corners.
6 Be pragmatic and weigh up the cost/benefit of engaging lawyers.
7 Be motivated to move on.
8 Spend the time to familiarise yourself with the process, and engage Divide to assist you to save you time and money.
If you think you and your partner can take the above steps, Divide can help you separate quickly and simply for a fraction of the cost of using two lawyers. We focus on outcomes – minimise the cost to maximise funds to be split.
As Chartered Accountants, we believe the financial settlement process is one we are best suited to support you through, as it is primarily a financial and administrative process.
We make the process simple by helping you understand and agree on both your current and post-separation financial positions. We do not act for only one party – we provide financial and administrative support to both parties to allow you to reach an agreement.
This approach of working with you both, together, means Divide can reduce the cost – both financial and emotional – at this time and help you both move on with your new life.
Divide – Simple Financial Separation (“Divide”) does not provide legal advice, we are Chartered Accountants.
This is general information only and does not constitute advice which may be relied upon.
Please contact Divide on 07 3367 5380 or via email at email@example.com to discuss your specific situation.