Home > Guide to Child Support and Other Divorce-Related Costs

Guide to Child Support and Other Divorce-Related Costs

By Eric Bank

Introduction

Divorce usually makes a deep impact on the financial and emotional health of once-married spouses, and especially on the innocent children of divorce. If you are facing the prospects of divorce, you will certainly want to review all financial and legal aspects with your financial advisor and your lawyer. Although most people know that divorce can be untidy, and even nasty, fewer are familiar with ways to manage the divorce experience so as to make sure they are party to an equitable financial outcome.

About 40 to 50 percent of first marriages terminate in divorce, while that percentage climbs to 60 percent for subsequent marriages, according to Utah State University. Clearly, the economic fallout is both profound and widespread, particularly for women and their children. In this guide, we’ll look at the legal costs of divorce, plus touch on the topics of child support and alimony.

The Legal Costs of Divorce

Divorce-related legal costs might vary from minimal (a few hundred dollars for a no-lawyer, uncontested divorce) to enormous (average attorney charges are $250 per hour and might be significantly higher). Unsurprisingly, a cordial divorce will be less costly. Community property locales (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington and Wisconsin) divide marital assets evenly, whereas the other states use a system of “equitable distribution” that is somewhat subjective. When a divorce goes smoothly, spouses can frequently come to agreement with little expense or fuss. However, quite a few divorces, even those in community-property venues, are disputed, often intensely, leading to costly court procedures, skyrocketing legal expenses, and other costs related to, say, investigating your spouse’s hidden assets or evaluating joint property.images.jpg

As we mentioned, the average divorce attorney charges about $250 per hour, but rates might fall anywhere from $50 to $650 an hour, based upon several factors, including:

  • The kind of legal work your attorney provides, from complete representation on all issues to representation on only specific subjects, or just consultation and document-preparation.

  • Where you live

  • Court case vs negotiated settlement

  • Your attorney’s depth of experience

  • The amount of mistrust and hostility between the divorcing spouses

Beyond legal fees, divorce costs might include child custody evaluations, property appraisals, investigative services, tax advice and the expense of employing additional experts. Survey data reveals an average expense per person of $15,500, of which lawyers reap $12,800. The average expense rises to $19,600 when any of the following issues are subject to dispute:

  • How to divide assets and liabilities

  • Child support or custody

  • Alimony, if any

  • Claims against your attorney (say, for incompetence)

Blend several of these issues and you could see expenses explode. Some messy, high-profile divorces, especially among rich celebrities, can easily cost over $100,000, and million-dollar divorces aren’t that rare in Hollywood. Alternatively, you can choose among a few popular and money-saving choices, including alternative dispute resolution, mediation, and binding arbitration, all of which sidestep the court system.

Survey results reveal that the average divorce takes about 11 months to complete, from filing the petition to receiving the final decree, although a friendly divorce can certainly proceed much more quickly. However, divorce cases that require court trials take on average about 17.6 months to complete. The survey indicates that overall satisfaction with the divorce process diminished the slower a court case proceeds, as protracted wrangling takes its toll.

On the plus side, if you want a no-fault divorce that doesn’t involve children or martial property, you can get forms for free from your local courthouse and fork over a relatively tiny sum to file them, all without the assistance of an attorney.

Child Support

Child support is awarded to a separated or ex-spouse who has been given prime custody of the children. If each parent shares custody equally, child support might still be necessary if one spouse has a significantly smaller income than the other. Child support is never deductible for the payer nor taxable for the recipient. A divorced spouse might have to fork over both child support and alimony, a result that could drain a goodly amount of the payer’s wealth. If you fail to pay court-ordered child support, you might have to spend time in prison. Sometimes, payment for a child’s schooling can be the subject of disagreement, because child support in some states covers only life’s necessities, such as food, clothing, shelter, and dental/medical treatment. In a friendly divorce, spouses might agree to divide education costs equitably, and they may decide to establish a trust or a Section 529 education account to which they both contribute and that pays for their children’s education expenses.

Alimony

Alimony is money that one spouse pays to help keep up the other spouse’s standard of living. Alimony is usually relevant when the spouses’ earnings are widely uneven, as with a stay-at-home spouse vs one with a paying job. Alimony can be doled out in a single lump sum or in periodic payments. “Separate maintenance,” rather than alimony, is paid to a separated but undivorced spouse. Every state has homegrown laws governing alimony, but one widespread arrangement is for higher-income spouses to cough up half their income less 40 percent of the income earned by their partner. You can take a tax deduction alimony or separate-maintenance payments, as long as none of these apply:

  • You filed your income taxes using a joint return

  • You make payments of non-cash assets

  • The payments cannot be for child support, which is not deductible

  • You both still live in the same home

  • You must continue making payments even after your ex-spouse dies

  • The payments arise from community-property business income (i.e., earnings from business arrangements between the two spouses, such as rental property ownership or a consulting partnership)

  • The payments are used to maintain the payer’s property

  • The payments are made voluntarily


Frequently Asked Questions