The Cost of Legal Separation and What to Expect
A legal separation is a formal arrangement where a married couple or domestic partners divide their assets and live apart, without completely severing their relationship. While this voluntary alternative to divorce may be the right choice for some couples , understanding the costs involved is essential. It can help you better prepare your financial future during and after your legal separation.
Many factors play into the final cost of separation. The following subsections outline these ten areas and offer ways for you to save money on your legal separation.
The Breakdown of Fees for Legal Separation
Separation entails more than any other essential cost: the cost of service. For example, if you want to move forward with a divorce, the court has to know if some services have been performed. The process for a separation is the same. The court has to know if an application form has been submitted. The fees are paid to the court. The amount will vary from one court to another.
The court can’t turn down your fee payment if an application is registered. The clerk will then record the fee in the system. The next fee that’s paid to the clerk is the order draft copy you ask him or her to draft. In Pennsylvania, for example, these fees are anywhere between $6 and $10. The clerk also charges you a $5 per page for any document copied by them. Basic expenses in preparing and drafting family law documents are not excessive.
Your attorney will charge a retainer, which he or she will spend as the case continues. When the retainer runs low, the attorney will write a letter asking for an additional retainer. Mark the invoices you see received from your attorney. They’ll include demands for payment with the words "Attorney Fees" clearly on it. The attorney bills from the date of hire to the date when the case is closed. If the case involves a custody or a support matter, the attorney will ask a judge to approve any award he’s made.
Fees for mediators can run anywhere between $75 and $200 per session, depending on the case. The advice of the mediator is usually free. If the couple asked a lawyer to help the process of mediation then the attorney will need an advance payment.
How the Cost of Legal Separation is Determined
Several factors can influence the cost of your legal separation. Geographical location, legal representation, whether mediation is used or not, a complex asset division and even child support can add to or subtract from the final tally.
Geographical Location: Laws vary from state to state and, in some cases, from county to county. Even the amount that is charged by your separation lawyer can differ significantly among the thousands of lawyers across the nation. Interestingly enough, the amount you may actually spend on your legal separation also depends more upon your circumstances than those of others. Not all separation cases are the same, and your costs will largely depend upon your circumstances, the practice habits and preferences of your lawyer and the amount of animosity between you and your spouse.
Legal Representation: The involvement of a separation lawyer can increase or decrease the final cost depending on the lawyer you hire and the manner in which you hire them. Obviously, in cases in which the couple is unable to agree even on basic decisions about child custody or the division of property, legal representation alone can double the cost. However, that is not the same for all of the population. Add to that the many different rates charged by lawyers to represent clients, and the final bill can vary significantly. While you may see ads on television or even hear them on the radio advertising low hourly legal fees, charging on an hourly basis may work against you in a case where there is much disagreement and no one is willing to agree with the other side. If you know little about how the hourly billing system works, you may end up paying an extraordinary amount for a situation that would have likely been over after the first consultation if an upfront fee was charged instead. When litigation is in order, the hourly system is often the best option. However, when the two parties are able to work together to achieve an amicable result, a retainer fee that covers the services you need to reverse the fees can save you money. Discuss your options with your lawyer so you understand exactly how he or she intends to charge you for their services.
Mediation: Similarly, if you and your spouse are able to divide assets amicably, with or without the assistance of a separation lawyer, you will likely save a lot of money that can be otherwise spent, and sometimes squandered, during the separation process. Of course, if animosity is so high that the two of you are barely able to even talk to each other, the mediation process may not be appropriate.
Complex Asset Division: The division of assets is one area where a considerable amount of time may be spent investigating or uncovering hidden assets. A case where there is substantial property can become very expensive, especially if you may be forced to go to court to settle on a solution.
Reducing the Cost: How to Budget for a Legal Separation
Just because you’re getting a legal separation doesn’t mean you have to give up your savings and future financial goals. There are plenty of ways to reduce the costs of a legal separation, including: Mediation is a powerful tool for saving money on a legal separation. Since both parties work together with a mediator, there’s less bickering and therefore, fewer hours billed. In some cases, parties can fill out the paperwork themselves and send it to the court. Make sure to check whether there is an application fee, and ask if any wait time is required once you submit. For individuals who qualify, legal aid services are available to provide pro bono advice, and in some cases, representation. This route is ideal for those in serious financial straits. There are a variety of ways to save on the overall costs of a legal separation. At the end of the day, the best way to save money during your separation is to keep emotions out of the process and focus on doing what’s right for your family.
Comparing Costs: Divorce Vs. Legal Separation
When comparing the costs of legal separation and divorce, it is essential to understand that there are both common and distinct expenses associated with each process. While both options aim to address the dissolution of marriage, the expenses involved can vary, depending on the chosen path.
In general, the costs associated with legal separation may be lower than the divorce process because it does not technically end a marriage. However, this is not always the case. There are situations in which a legal separation may become lengthier and more complex than a divorce, ultimately resulting in similar or even greater expenses.
One of the main expense areas that can overlap between divorce and legal separation is legal fees. Both processes require the services of a family lawyer to navigate the legal complexities and ensure all necessary agreements and documents are completed. Unfortunately, these fees can add up quickly, especially in contested cases where negotiations and court appearances are required.
Another expense area that both divorces and legal separations share is asset division. Whether in a legal separation or a divorce, assets must be divided fairly and justly. This can involve the sale of certain properties , which can result in expenses related to real estate valuations and transfer costs, as well as the cost of dividing retirement accounts.
In some cases, families may benefit from the legal separation process due to potential temporary financial savings. For example, when couples remain legally married, they may still file taxes together, and in some cases, retain access to each other’s health insurance. For some couples, this can make financial sense, especially if there are children involved.
It is also important to consider the potential for reconciliation when exploring legal separation. Legal separation can provide couples who may not be sure of their decision the opportunity for respite. This, unfortunately, sometimes results in more considerable costs down the line when parties eventually decide to proceed with a divorce following the separation period.
While not always the case, legal separations can be faster than divorce because there is no need for lengthy court battles or extensive legal proceedings. However, this is dependent on the complexity of the issues involved. In some cases, a separation may last for years before a divorce can be finalized.
There are many factors that can affect the cost of legal separation versus divorce.
The Financial Ramifications of a Legal Separation
The long-term financial impact of legal separation can create very different outcomes than an ending of your marriage through a divorce. For example, when you file a divorce, there is a division of asset values and of your debts (including tax debt) as of the date of filing. When you obtain a legal separation, you do not obtain that final division of your assets and debts.
If you do not file a divorce while legally separated, this means that you both continue to accrue assets and debts in your individual names and then get to do the divide and conquer process at a future date. Let’s say the day after you obtain a legal separation, one spouse incurs a tax liability for several thousand dollars, due to an income earned during the marriage. In that situation, it’s possible that the other spouse could later be responsible for repayment of that tax bill, to the extent that it benefits the entire family.
On the other hand, if a divorce is filed, that same tax liability would be the responsibility of the income earner alone. This is how the long-term financial results differ from a legal separation to a divorce. In California, if you file for a divorce, all income, assets and debts are "trued up" (divided equally in value) as of the date of filing. Legal separation is different — each spouse retains ownership and continues to accrue value in their assets and debts, and then at some unknown date in the future a division may occur.
Conclusion: Estimate the Costs of Legal Separation
Planning for the costs associated with your legal separation, both to the courts and to an attorney, is imperative if you are to avoid the situation you have identified and feel as if you have lost control over your financial well-being . One of the best things you can do for your situation is to anticipate costs and budget for them. By doing so, you will be less likely to feel stressed by your finances and will contribute to alleviating stress during a difficult period while paving the way for a much smoother process during your legal separation.