Thinking About Separation or Divorce? Here Are All the Expenses You Need to Plan For

When someone is on the fence about separating from or divorcing their spouse, finances often play a major role in their decision-making process. While some sources estimate the average cost of a divorce to be somewhere around $11,000, many divorcees come to find that the actual short and long-term costs are much, much higher.

While a divorce attorney’s services come at a cost, experienced divorce lawyers specifically aim to help their clients secure more favorable divorce outcomes that preserve and protect their financial futures. Let’s take a look at some of the expenses you should plan for in the event of a separation or divorce and discuss how working with a skilled divorce lawyer can help you make more informed decisions during negotiations.

What makes divorce so expensive?

Financial barriers can seriously impact a couple or individual’s decision to divorce. This is because married couples often share a significant number of high-value assets that typically must be divided in some form or fashion during a divorce – and that’s just the tip of the iceberg.

Once a couple separates, individuals often find themselves facing new and enhanced day-to-day costs in addition to new expenses like attorney’s fees and court costs. All in all, the potential impact of these new and compounded expenses may lead some couples to stay together for longer than they should or make legal decisions based purely on the potential financial impact of moving forward with their divorce.

What are the most common expenses in a divorce?

In North Carolina, couples seeking an absolute divorce must live separate and apart continuously for at least one year, with the intent of at least one spouse for the separation to be permanent. This state-specific timeline can lead the divorce process to go on for longer than might be typical in some other states.

From the moment a couple separates, they may start to notice new expenses piling up, only to culminate in even more substantial expenditures once their divorce is finalized. For this reason, it’s important to carefully consider your financial situation and plan for potential future expenses to ensure your needs are met during your mandated separation period and beyond.

Here are some of the most common expenses to keep in mind when thinking about a divorce:

Housing and household costs

Due to North Carolina’s unique separation requirements, two of the first financial decisions divorcing couples need to make are:

1. Who will live where?
2. Who will pay for each residence?

Remember that the separation clock doesn’t actually start ticking until you and your spouse have physically moved into separate residences with the intent to remain separated. This often means one spouse will need to find and pay for their own place to live and cover any other household expenses they may incur. Double the residences generally means double the expenses, so it’s important to have a financial plan in place to cover these costs prior to initiating a separation.

Additionally, some couples may struggle to arrive at agreements around who should stay in the shared home and who should bear the burden of the mortgage payments while separated. A separation agreement can help clarify some of these responsibilities and provide a framework for future asset division efforts once divorce is formally on the table.

Child-related expenses

When separating or divorcing couples share children, they may incur a number of child-specific costs over the course of their case. While many people think first of child support payments when contemplating a divorce, it’s easy to forget about or undervalue a wide range of other child-related costs.

Since couples usually share child-rearing responsibilities in some capacity and/or split child-related expenses, separation can really throw a wrench in these arrangements. For example, parents may need to outsource childcare to help them navigate new parenting schedules or purchase a new assortment of clothes or toys to keep at a child’s second residence.

Even seemingly simple family transitions can come with unforeseen costs. Between school supplies, medical expenses, transportation costs, child support and more, failing to adequately plan for your child-related expenses can come back to bite you later on.

Division of debts and assets

It can be tempting to focus so much on the division of assets during a divorce that we neglect to consider the equitable division of our debts. In North Carolina divorces, decisions about how to split shared debts and assets are fueled not necessarily by what is equal but by what the court deems to be fair. That means your shared assets (homes, savings, investment properties, etc.) are subject to division as well as your shared debts (car loans, credit cards, finance agreements, etc.).

When preparing for your divorce, it’s important that you carefully factor in the full value of your shared debts as well as the value of any marital assets. Failing to do so could lead you to overestimate your financial position just to walk away with less than you anticipated at the conclusion of your divorce. During separation and beyond, it’s important to create and adhere to agreements about how to manage shared debts to avoid any action being taken against you by a lender in the event of delinquent payments.

Other long-term costs

Alimony and child support payments may be top-of-mind long-term financial considerations for some couples following a divorce. However, there are some other expenses that may fly under the radar during the early stages of a separation.

For example, spouses who share insurance policies may fail to properly account for the cost of individual policies when working on their post-divorce financial plans. Health insurance, auto insurance, homeowner’s insurance and life insurance policies all come at a cost, so it’s important to factor these long-term expenses in your future budget.

Similarly, retirement accounts and certain benefits – like potential Social Security derivative benefits – may be impacted by the termination of a marriage. An experienced financial planner or similar professional may be able to help clarify the specific requirements of your accounts in the event that you need to split your assets or make changes to beneficiary-designated accounts.

Legal fees and court costs

As with most legal proceedings, there are certain costs associated just with opening and navigating a case. Divorce is no exception, as these cases require investments like attorney’s fees, filing fees and other court costs. In North Carolina, most filers can expect to pay roughly $225 in filing fees (plus an additional $10 fee if a name change is requested at the time of filing) when seeking an absolute divorce.

Legal representation also comes at a cost, which can be difficult to estimate since divorce lawyers often set their own fees. Even in uncontested divorce cases, attorneys still do a lot of heavy lifting between filing, negotiating, reviewing documents and more. When a case goes to trial, these fees tend to increase, as there are significant time and labor investments required in these situations. Some divorce cases may also involve expert testimony from financial planners or other professionals, which can result in additional case costs when all is said and done.

The easiest way to dispel any uncertainty about these expenses is to consult with a trusted divorce lawyer in your area and ask for more information about their usual fee structure. They should be able to give you some clarity around how they bill for their services and what kind of investment you might be looking at based on the complexity of your case.

Miscellaneous costs

Beyond the common expenses outlined above, other miscellaneous costs can creep up on you over the course of a separation or divorce. These expenses can easily add up over time, so it’s important to proactively plan for unforeseen costs like:

• Counseling or therapy session fees
• Document preparation fees
• Appraisal costs
• Financial planning services
• Transportation for children or separated spouses
• New furniture, appliances and utility costs
• Tax preparation fees during the transition
• Name change fees and related expenses

Adding some wiggle room into your budget can help alleviate the financial strain associated with both major and minor expenses. It can be wise to overprepare prior to initiating a separation so you don’t find yourself suddenly sidelined by surprise costs.

Final thoughts

Divorce comes with a variety of emotional, logistical and financial implications, but careful planning can help spouses manage the separation and divorce processes with a little more confidence. Getting a clear, upfront picture of the major and minor costs can help you stay one step ahead of potential financial hurdles and maximize the efficiency of your divorce process.

At Epperson Law Group, PLLC, we understand that North Carolina’s separation requirements can complicate the financial picture for couples planning to divorce in our state. That’s why our team is dedicated to helping our clients advocate for the most favorable divorce outcomes available to them under the law without adding unnecessary time or expense to the process.

If you’re thinking about separation or divorce and want to better understand the potential financial ramifications in your case, give us a call today or fill out our online contact form to schedule a free consultation with a member of our team.