Going through divorce is hard. The relationship with the person who pulled you head-over-heels in love has probably disintegrated into a maelstrom of bitterness and anger. Now that you’ve made the decision to go your separate ways, you might feel as though you’re embarking on the road to recovery. But getting through the divorce comes first. The process is as much about your financial health as it is about your emotional state because divorce greatly affects your financial security. Divorce is a financial disruptor that requires planning and usually hiring an attorney.

Divorce often affects finances in these areas:

  • Assets
  • Child care and custody (if children are involved)
  • Debt obligations
  • Housing
  • Income (decrease resulting from taking on child care duties or from elimination of spouse’s income)
  • Income taxes (change from married filing jointly to single filing status)
  • Insurance
  • Legal expenses (attorneys’ fees, mediation, court costs)
  • Retirement or Nest Egg
  • Spousal support (also called alimony)
  • Transportation (perhaps from traveling more frequently or longer distances to visit children)

This guide breaks down what to expect in your divorce. It gives pointers to understanding divorce laws in your state and highlights mistakes to avoid as you wade through the process of reshaping your life after the Big D.

State Divorce Laws at a Glance

Click on your state to find your state’s support calculator and a summary of your divorce laws.

Sources: US State Statutes and Case Law

How a Divorce Works: A Timeline

In a sense, divorce is the final showdown between you and your soon-to-be ex. You don’t get to walk away until certain matters are settled. The traditional divorce process, sometimes called litigation, is often highly contentious, during which you pull at each other to get what they want. Fortunately, there’s an alternative, which is called collaborative or mediated divorce. Let’s look at the timeline for both.

Adversarial Divorce Timeline

From start to finish, an adversarial divorce — conducted through court proceedings — can take years to play out. Some states, such as California, require a minimum of six months before allowing a judge to terminate a marriage.

State laws vary but here’s generally what happens when you initiate an adversarial divorce:

Action Description

File Petition for Dissolution of Marriage, Petition for Divorce or Complaint for Divorce

Filing with court formally begins the divorce process.

The petition states the reasons for the divorce and how you want to settle financial, custody and other issues

Serve the Petition and Summons

Your attorney or court serves the petition and summons to your spouse.

The summons calls for your spouse’s response to the petition.

Answer the petition

Your spouse answers your petition.

Usually receives about three weeks to answer.

The answer details how your spouse wants to settle financial, custody and other relevant issues.

Attend temporary hearing

Judge holds a hearing to set up temporary orders for spousal support, restraining orders, child support, child custody and visitation rights.

Participate in mediation

Judge may order mediation (some states require mediation). Often entails several hours with a court-approved mediator who attempts to get you and your spouse to agree on issues, such as custody and visitation terms.

Conduct discovery

Your attorney and spouse’s attorney exchange formal requests for documents and information about all unsettled issues, especially finances. This may involve numerous interrogatories and depositions. The receiving spouse usually has a minimum 30 days to answer an interrogatory. Depositions are usually required to be ‘recorded’ by a certified court reporter. Minimum notice and response times drag out this process, so discovery can take several months to several years.

File motions

Your attorney might file a motion to attempt to change a temporary order. The motion makes a legal argument that supports the need to change an order.

Try to reach settlement agreement

At various times during the divorce process, both sides may attempt to reach an out-of-court agreement. Doing so may save on overall divorce costs.

Undergo custody evaluation/Secure expert witnesses

If you and your spouse have not yet reached agreement on custody and visitation, you may be ordered to attend an evaluation. The judge, you or your spouse’s attorney may request the time-consuming, costly evaluation. Trained mental health professionals might conduct testing, interviews and observations of parents and children. You can also secure your own expert witness to support your argument for custody or other issues.

Attend pre-trial conference

Judge may call a conference to review the evidence that will be presented at trial or to encourage a settlement. Both sides receive a general idea of how the court views certain issues.

Attend hearing or trial

If no settlement has been reached, both sides present evidence and arguments regarding property division, child custody, visitation, child and spousal support.

Enter final judgment

Judges enters order that includes financial and custody terms. Only two states (Georgia and Texas) allow divorces go to jury trial, in which the jury — not the judge — makes decisions about certain aspects of the divorce dispute. Judge grants the divorce.

Collaborative Divorce Timeline

A collaborative divorce is less adversarial in nature and format because you come to agreement over divorce issues outside the courtroom. You and your spouse may cringe at the idea of spending the remainder of your lives together, but you can still address each other without spiraling into a shouting match. You hope to lessen the financial cost and emotional toll — particularly if you have children — through a collaborative divorce that involves alternative dispute resolution. This means you and your soon-to-be ex, with your attorneys, reach a divorce agreement before presenting it to a judge. Unlike an adversarial divorce, which can take years to finalize, a collaborative divorce generally takes a much shorter time, at much less cost.

One caveat: If you fail to reach agreement through this process, you and your spouse may end up going back to the drawing board with an adversarial divorce, which would only add to the total cost of your divorce.

Here’s what you can expect in a collaborative divorce:

Action Description

Enter participation agreement

You, your spouse and your respective attorneys agree that if the collaborative divorce process fails, your attorneys will withdraw from the process, including any litigation. Your attorneys can only work on settlement negotiations.

Hire a mediator

Together you choose the mediator who will be present at meetings

Participate in first four-way meeting

You, your attorney, your spouse and your spouse’s attorney meet to begin hashing out divorce issues.

File a petition for divorce

Unlike adversarial, the filing is a joint petition.

Gather information

Parties disclose and exchange financial and custody information.

Meet with divorce coaches

You and your spouse may meet with a divorce coach to negotiate and address emotional concerns present in the divorce process. The coach is a mental health professional, not your therapist, and helps you and your spouse think more clearly during the divorce process.

Participate in second four-way meeting

Meet to discuss status of negotiations and come to agreement on any divorce issues.

Meet with specialists

You may agree to meet with a child specialist to work out child custody issues that are in your child’s best interest. The child specialist can help you and your spouse understand how your child is coping with the divorce. You might also meet with a neutral financial specialist, who evaluates your individual needs and attitudes toward finances and who can help you and your spouse agree on a fair solution.

Participate in third four-way meeting

Meet to discuss status and come to agreement on any remaining divorce issues.

Reach custody agreement

Wrap up resolution of all divorce issues, including child custody.

Draft settlement

Attorneys collaborate and draft settlement agreement addressing all divorce issues.

Review settlement

Review and approve the settlement with your attorney.

Participate in final four-way meeting

All parties come together to sign the settlement agreement.

File settlement with Court issues divorce decree

Mediator files the settlement. Judge approves the settlement and grants divorce.

9 Common Financial Mistakes to Avoid in Divorce

Nobody wins in a divorce, but some lose more than others. You can avoid being the bigger loser by avoiding these nine common financial mistakes:

1

Coming up Short on Cash

A particularly acrimonious divorce can cost more than $20,000. Failing to plan for the cost of the divorce can easily send you into debt and much worse off financially from the divorce.

How to Avoid

If you see your marriage heading toward divorce, as early as possible, begin shoring up savings and alternative funding sources. Divorce itself is costly — with legal fees, professional consultants and court costs — but smart money moves before the divorce can prevent you from ending up in the post-divorce poorhouse.

2

Filing Before You Formulate a Plan

Maybe you can’t stand being in the same room as your spouse and jumped ship as soon as you decided you wanted a divorce. Filing those divorce papers was a huge relief. But lack of careful preparation means you’ll end up reacting to divorce developments without a clear, strategic plan. There’s only so much an attorney can do to help if the damage has already been done.

How to Avoid

Understand how long and winding the road of divorce can be before you file by educating yourself about it, online or the good old-fashioned way, through books. Consult with legal and financial professionals about your situation. You need a plan, and professionals are much more well-versed with divorce issues.

3

Failing to Keep a Paper Trail

You might have a good argument for property division or child custody, but failing to back it up with hard documents is of little help. With inadequate proof, you’ll only end up pitting your words against your spouse’s.

How to Avoid

As soon as possible, preferably before your divorce begins, obtain copies of all financial records — for both joint and separate accounts — that prove ownership and interest amounts. Include things like tax returns, credit card statements, property titles, loan documents, car registrations and investment brokerage statements.

4

Discounting Income Tax Changes

Forgetting to factor in taxes can result in paying more taxes or failing to fight for what you need. When it comes to the IRS, the government treats married couples and singles differently. A single person often ends up paying a higher tax rate than a married person. Or, if you end up receiving spousal support, you fail to calculate the taxes you’ll pay on it and end up with less than you need.

How to Avoid

Property division decisions should always consider the tax ramifications. Figure out the after-tax value of the disputed property. You may need to consult with a CPA to determine whether getting the brokerage account and passing up the retirement plan is a better move. A CPA can tell you whether you are better off selling the house or keeping it a few more years.

5

Failing to Piece Together the Big Picture

You can’t argue effectively if you don’t fully understand where you stand financially. You fail to properly investigate your spouse’s investments and overlook assets, which means you don’t get your fair share.

How to Avoid

Make the effort to take inventory of all assets and investments. Doing so may jog your memory of your spouse’s separate banking account or safe deposit box that was opened years ago. Carefully review documents — such as retirement plans and insurance policies. Even your spouse’s hobby equipment may be a worthwhile asset to include in negotiations. Sometimes, engaging a forensic CPA can be helpful.

6

Allowing Emotions to Rule

Divorce is emotional, and there’s no way around it. But letting your emotions dictate your every decision can easily result in financial decisions that exact long-term damage. Basing decisions on revenge can prolong the divorce, adding exponentially to attorneys’ fees and court costs. Emotions may also push you to fight over every issue, including inconsequential ones, while your attorney charges you $5 for every minute you seethe at your spouse.

How to Avoid

Keep your lid on your emotions and consider whether mediation can work in your situation. As much as possible, treat your divorce like a business transaction. Your attorney is not your friend. A friend doesn’t bill you $300 for a tear-filled tête-à-tête. Take a step back and consider the long-term ramifications of your decisions. Consulting with professionals who can help you see beyond your emotional motivations may act as a damper on the flames of acrimony.

7

Neglecting Your Post-Divorce Livelihood

Focusing too much on ending your marriage leaves you vulnerable to the aftermath — how to stay afloat financially in the long term. The stress of flying solo is already hard enough without the worry of finding a job and bringing in income. If you receive spousal support, those payments may simply not be enough. Even more, your divorce agreement may require you to work.

How to Avoid

Take on an “act, not react” attitude. Before or during your divorce, work on boosting your career or reviving it if it’s been on the shelf during the years you spent raising your children. Getting a head start on this likely scenario means you’ve created some job security or you’re that much closer to a salary raise.

8

Shunning Professionals

Hiring an attorney for your divorce is a given for most people. But ignoring the long-term financial benefits of other professionals who can bolster your divorce arguments can prevent you from getting the best outcome from the judge.

How to Avoid

Ask your attorney about other professionals who can help solidify your property division and custody arguments. A forensic accountant may be useful for locating your spouse’s hidden assets. A financial adviser who specializes in divorce may help you work out the best strategy.

9

Focusing Too Much on One Issue

Your world is turning upside down and you identify one issue that you must win. Perhaps it’s the house — you want your kids to continue living in it even though taking on the mortgage payments solo will make you cash-poor but house-rich. Or perhaps you love your car — it’s your anchor in this storm. Your spouse will make you pay for this depreciating asset at a cost much higher than its book value.

How to Avoid

These attachments weaken your leverage and consulting a professional, like a divorce financial planner, may help you better separate emotions from rational decision-making.

Avoid Litigation to Lower Divorce Costs: Q&A With Jacqueline Newman

expert Jacqueline Newman Lawyer & Divorce Expert

Jacqueline Newman is a divorce lawyer and the managing partner of Berkman Bottger Newman & Rodd, LLP, one of the largest and only divorce law firms in New York City specializing exclusively in collaborative law, litigation and mediation. She explains how the cost of divorce largely hinges on whether you settle issues through the collaborative process, mediation or traditional litigation.

What are some common financial mistakes people make in a divorce?

Very often someone will walk into my office and list all their assets for me. They’ll include a bank account into which they’ve deposited $100 from every paycheck. Over time, they’ve accumulated X amount of money, and they think it’s theirs. Well, it’s not. It’s still marital money. That is a common misconception. Another mistake a lot of people make is keeping themselves in the dark. Maybe they just didn’t want to deal with finances, or they didn’t want to step on their spouse’s toes. It’s important to have an idea of what you own. I’ve had cases in which the client finds out the family is in a great amount of debt and the client didn’t know about.

Are collaborative divorces gaining in popularity? When is it appropriate or inappropriate?

Collaborative divorces are steadily increasing, and the increase will continue as more people understand the option exists. A lot of people have never heard of it: Of the people walking through our firm’s doors, it’s a 50-50 split. Collaborative divorce is much more attractive than litigation. People come open to the idea of wanting to avoid a bloodbath. Assessing whether a collaborative divorce process is a good fit is ultimately up to the client. In some cases, it’s glaringly inappropriate. Other times, I encourage it if people are both open to it. Both spouses have to be agreeable to it. The key element to the process is transparency. It’s inappropriate if a person who walks into my office tells me that his or her spouse is hiding money and anything the spouse does can’t be trusted. Oftentimes, abusive situations are inappropriate for the process. If one person is not going to be forthcoming or equal handed, then that person is probably not going to listen to their attorneys [during the collaborative process].

How do the financial costs of collaborative law compare with those of litigation?

Collaborative law takes a nice interdisciplinary approach. You bring divorce coaches, therapists and neutral financial specialists into the process. I always tell my clients that I’m the most expensive professional involved, so why not use these other professionals [to work out divorce issues]? In litigation, the biggest expense is motion practice — filing motions back and forth. The other huge expense is when you go to court. More often than not, the courtrooms are completely filled when you arrive for your 9:15 am hearing. You [and your attorney] could end up waiting until after lunch, at 2:30 pm, [for your case to be heard]. So you’re sitting around all day and paying attorneys’ fees for sitting there. I can imagine that other jurisdictions’ court processes work similarly. It’s completely ineffective. In a collaborative process, your fees go toward actual work on the case.

What about mediation and its financial cost?

Mediation is more common than collaborative divorces. It’s taught in law school and it’s a mainstay. It is for the most part less expensive than full litigation. You save in mediation because you have one person trying to mediate, with the attorneys on the outside. Attorneys don’t generally attend mediation. You’ll still pay the legal cost of having your attorney review the mediation agreement, but the cost is much less than if your attorney was sitting through the actual negotiations.

What about when children are involved — how do custody issues affect the financial cost?

If someone comes to me to initiate a divorce and tells me that they’ve already agreed on custody, I tell them they just saved themselves at least $100,000 in attorneys’ fee and $200,000 in therapy classes for them and their children. We deal with divorces for people in the high net worth space. A divorce could cost a client anywhere from $10,000 to $1 million.

Are there time savings in a collaborative divorce or mediated divorce compared with full litigation?

Litigation generally takes the longest because you are working on a court calendar. You may be dealing with motion practices, and you’re depending on someone else to move the case along. With a collaborative divorce, you are in a position to more or less control the timeframe. [With that said,] the difference in these processes is that you go as fast as the slowest person. If someone is not ready to move forward, he or she has the opportunity to do that in a collaborative divorce. But in litigation, a court will put you on a schedule. Litigation has a bad rep — and rightly so — because people now have more access to information. They hear through social media, for example, if someone tells them he’s doing crossword puzzles while waiting for the judge. This kind of information is much more available than 15 years ago.

How Much Will You Receive or Pay in Alimony?

“Alimony” is a popular term people use when describing support payments one ex-spouse pays the other. How much you will receive or pay in alimony depends on many factors, including the state where you reside. In some states, like California, courts use a formula that factors in the income for both spouses, any minor children or dependents, and the length of the marriage. In other states, judges use their discretion to come up with a support amount, if any. In these states it’s anyone’s guess how much you might expect to pay or receive. This uncertainty is a significant reason to consider a collaborative divorce where you and your soon-to-be-ex-spouse answer the support payment question yourselves.

Courts look at many factors when deciding how much support, if any, one spouse needs to pay another:

  • Length of the marriage
  • Age and health of each spouse
  • How much both earn or could earn in their chosen industries
  • Years both attended school and any degrees or certifications
  • When either attended school (before or during marriage)
  • Work skills for each spouse
  • Work experience for each spouse
  • Work during the marriage
  • Who will care for any children and dependents
  • If either used marital money unreasonably, if so how much
  • How any property and debt is divided
  • Any other relevant factors

State laws use technical terms to describe alimony payments. No state offers all of the following; see the table State Divorce Laws at a Glance to learn which may be available to you.

Long-Term or Permanent Support

May be granted when marriages were 10+ years in length and the dependent spouse is not employable. Usually ends when dependent spouse cohabitates or remarries. Not allowed by all states.

Rehabilitation

Intended to help a dependent spouse get retrained and back into the workforce. Usually ends when the dependent spouse becomes employed in their industry.

Reimbursement

Usually consists of a two-part test. Did the now-dependent spouse make an economic sacrifice? Did the sacrifice result in an economic gain for the other spouse? For example, did a one spouse drop out of MBA school to support the other’s attendance in medical school? In this example, a court may, if the law allows, order the doctor to pay the MBA dropout reimbursement alimony.

Reorientation

Provides dependent spouse living expenses while the couple’s marital assets are distributed and sold.

Temporary or pendente lite Support

Support paid to the dependent spouse for a limited time, which allows the dependent spouse to set up a household. This may be called “reorientation” support.

Reader Resources

States handle divorces, so you’ll need to look at the state laws where you live to understand what to expect in your divorce. You can still gain some understanding about the divorce process and its issues through these resources:

American Bar Association

Learn about the factors that determine child custody, child support and visitation decisions in divorce. Also understand the issues that may alter custody arrangements and child support amounts.

The Center for Divorce Education

Find educational articles, tools and programs about divorce and minimizing its negative effects from this non-profit organization. You can also use its list of additional resources to locate mediators, divorce support groups and other mental health programs.

MedlinePlus (U.S. National Library of Medicine)

Access information and resource links to journal articles, statistics and research that help you better manage the stress of divorce for yourself and children.

Utah State University’s Utah Divorce Orientation

Use this handy worksheet to break down your finances. The worksheet prompts you to list assets, personal property, financial accounts, business interests and debt — as a starting point to figure out the impact of divorce.

Women’s Institute for Financial Education

Retrieve information and answers to commonly asked financial questions relating to divorce and its impact, as part of this non-profit organization’s mission to further women’s financial independence.