Keeping Your Costs Down in Divorce

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I recently came across a post written by Ontario attorney, John Schuman, who does an excellent job of explaining costs in family court cases.  He breaks the effects on cost into six factors:

1)    Is a trial required to address the issues in the case?

2)    Is custody or access to the parties’ children at issue in the case?

3)    How adversarial are the parties?

4)    How complex are the parties’ finances?

5)    How much counseling of the parties is necessary?

6)    How much investigation, i.e. disclosure of financial information, is necessary?

I have rearranged Mr. Schuman’s list based on my opinion of biggest effect on cost to least, but each of these factors can increase costs and a combination of them can increase a client’s costs significantly.  Further, reduction of legal costs can create a strategic benefit for a client because the financial stress of the process often creates a desire to settle the issues in the case.

So, how do we address the six factors?

1)    Settling a case early will save parties a large amount of money.  Preparing for and attending trial is often half of the cost of the case for a client.  Also, the longer a case last, regardless of whether it goes to trial, necessarily increases cost.  However, factor #3 – adversity between the parties – can occasionally make the option of settling the case difficult, if not impossible.

2)    If settling the entire case is impossible, settling custody and visitation is the next best option.  It is a bit of an understatement to say that the state is not great at raising its citizens’ children.  Further, if the children’s parents can come together in the children’s best interest, this removes the expense of employing a Guardian ad Litem to investigate the parties’ parenting abilities and represent the children’s best interest. Of course, settling custody and visitation is also affected by factor #3.

3)    If parties are adversarial in the extreme, this factor will have the biggest impact on cost because it makes settling any issue in the case difficult.  However, this factor also increases costs in and of itself. Letters between attorneys regarding minor harassing behavior, unpaid bills, disputes over visitation time, etc. often cost more than the issue itself.  And, contempt actions regarding these issues create mini-trials that can increase costs significantly (see factor #1). Often, these disputes are analogous to the neighbor who allows his dog on your property or blows his leaves into your yard.  Alone, the issues would not amount to litigation, but, because the parties are already in litigation, they create an opportunity for an emotional but costly win against a soon-to-be ex-spouse.

4)    The complexity of the parties’ finances is a complication that can also increase costs.  If pre-marital property is involved, it is necessary to trace these pre-marital funds to prove they have not been commingled with marital funds. If the parties own a business or businesses, it is necessary to value these businesses. Each of these issues often requires the additional but necessary expense of hiring a knowledgeable witness to review the parties’ finances. If the parties can agree on a single professional this can reduce the cost of hiring competitors.

5)    I will echo Mr. Schuman’s words regarding counseling of clients. Especially in the domestic field of law, attorneys must act as counselors to their clients extensively.  They are not insurance companies, corporations, or other entities familiar with litigation, but rather individuals going through one of the worst periods of their lives.  However, clients should understand that attorneys bill by the hour because time spent with one client is time they cannot spend with another client who is also going through one of the worst periods of his or her life.  One effective strategy for reducing counseling time with an attorney is to gather questions and issues into one weekly phone call or meeting, allowing the client and attorney to address multiple issues at once.

6)    Finally, the discovery process in family court is an expensive process. A client who collects as much of his or her financial information prior to filing reduces the cost of this process. A client should collect the last three years of tax returns, bank statements, credit card statements, and any other account statements available and bring them to his or her attorney prior to filing. Also useful are appraisals of any property owned by the parties, recent paystubs, and a monthly budget for their household. More information provided by a client to the attorney means less investigation and costs involved later.  However, there are occasions when investigation is absolutely necessary; for example, where the other party is actively hiding information about his or her finances.

In conclusion, a divorce can be a collaborative decision to separate lives and finances or an adversarial war. The costs of the latter decision can be extreme.  The adversity of a parties’ soon-to-be ex-spouse is not a unilateral decision; however, a party can reduce costs and gain a strategic advantage in the case by reducing the conflict as much as possible.

By: Luke Burke

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