In this podcast, Heidi Opinsky talks with John Maher about the cost of a divorce. She outlines the costs that you’re likely to incur during a divorce such as fees for divorce attorneys, real estate appraisers, forensic accountants, etc. Then, she explains why it saves money to resolve your divorce without going to court.
John Maher: Hi, I’m John Maher. I’m here today with Heidi Opinsky. Heidi is a divorce and child custody lawyer in Connecticut and New York with over 30 years of legal experience in mediation, collaborative law and litigation. She represents clients in a full spectrum of family law needs. Today, we’re talking about how much does a divorce cost? Welcome, Heidi.
Heidi Opinsky: Good afternoon, John.
John: Heidi, what are some of the expenses that a couple will typically incur during divorce proceedings?
Heidi: Yes. Immediately when you retain a divorce lawyer, you’re going to pay what they call a retainer payment. Most, if not all, divorce lawyers require an upfront retainer payment and it’s usually assessed on what work they need to do and perform right away, without waiting.
So, your feet on the ground, running, what will they incur necessarily right away? Are they going to be walking in and trying a case or are they just going to be filing the initial pleadings for the divorce to get started? But most attorneys will have, generally, in their mind, an initial retainer that works for them so that they can get started. That varies from attorney to attorney.
John: And from situation to situation. Like you said, if they’re already halfway through divorce proceedings and you’re picking it up part way along and you’re immediately going to trial, then you know, “Okay, it’s probably going to take X number of hours,” or something like that.
Heidi: Correct. But most of us, even with the initial retainer, it’s not like we think at any point that this initial retainer is going to see you throughout the entirety of your case. Most of us don’t have retainers that see the client through the entirety of the case.
Forensic Accounting, Actuary Valuations, Real Estate Appraisals, and Other Expenses During a Divorce
John: Okay. Then what are some of the other expenses that typically occurred during the proceedings?
Heidi: So, other expenses, you may need what’s called an expert forensic accountant. You would retain an outside expert forensic accountant when, for instance, there’s a business that needs to be valued, or in the case of tracing marital assets, you may want an expert to trace it as opposed to taking your legal mind or your paralegal’s mind or your associate’s mind to trace assets that come from discovery.
Accountants generally have the ability to do it a lot faster, sometimes, with programs that they may have. The issues may be more complex, so you want to get a forensic accountant who then can testify in court as to the tracing and their determinations and put a vocal piece and a number and a concept in before the mind of the judge, that has a rubber stamp with more value on it than just the client testifying about it, for instance.
So, you may choose to have the accountant testify on the tracing of those assets. That’s the forensic accountant. They’re usually there to value assets, businesses, marital assets. They could be doing what’s called a Black-Scholes analysis on stock, things like that. That would be the expert forensic accountant.
Then you could have an actuary who does valuations like present values on pensions, and that is generally an actuary or a pension attorney. There are many attorneys that privately specialize in being a pension attorney and they can do present valuations on pensions also. Lots of times we do what’s called a qualified domestic relations order. So, depending on the type of pension, if you’re not getting a payment over time, monthly, at the time of a retirement, so you’re not doing a present value calculation, you’re getting a number. A lot of times, we will also hire a pension attorney or an actuary to do a QDRO, Q-D-R-O, where they have what’s called domestic relations order, DROs, D-R-O.
We hire them to do qualified domestic relations orders. That usually happens because you’re transferring, for instance, 50% of a qualified plan held by a spouse into another qualified plan held by you. So, you get the 50% of the value by the QDRO, and that’s a separate document and order that the judge signs, separate from your separation agreement.
Then there’s also real estate appraisers, obviously, if you need to appraise a house or a building, commercial real property, there’s clients that own commercial real property. Usually, you’ll need a commercial real estate appraiser, because residential and commercial are entirely different in how they value the real estate, also. So, you may need a commercial real estate appraiser, you may need a residential real estate appraiser.
Then, sometimes, if you’re doing a collaborative divorce, they talk about everyone on a team and you have your own team and the other side has their own team. Sometimes, you’ll have a psychologist that’s working with you on your team, but that doesn’t happen quite as often. The usual players are the accountant, the actuary, the real estate appraiser. Those are the more well used, more commonly used third parties that get used.
Heidi: Then of course there’s costs for filing fees initially, those usually run upwards of 350 to $500 sometimes to file the case and start the case on the docket with the court. The court always grabs money when you’re filing a case, they have filing fees in the county clerk’s office or in the court’s clerk’s office and they grab money then. They’ll grab money usually at the end of the case, too, when you’re filing your judgment. Or if you’re filing certain new proceedings within a case, they’ll grab some filing fees.
Then you have state marshals that have to serve papers on clients. They need to be paid separately. If you’re taking depositions, you’ll have court reporters that are transcribing the deposition, they need to be paid separately for the transcripts of the deposition. Then you have court reporters when you’re in court and there’s oral argument between counsel or this is a trial. The court reporter that’s actually transcribing the proceedings in the court also needs to get paid separately.
John: Does the person who’s going through the divorce have to pay all those fees? Or is that typically handled by the attorney and then you bill the client or how does that work?
Heidi: Commonly, when you’re doing trial transcripts, because both sides need the transcript, it’s not uncommon for an attorney to say, “Should we share the cost?” So, for the court reporters in court. But sometimes the attorneys will say, “It was a short proceeding, I don’t want the transcript. You can get it if you want.” Then they’re not going to, but if it’s a longer trial and it’s day to day, it’s not uncommon to share the cost, because it will get costly into thousands of dollars. That would be common. Usually, when you have depositions, the attorney conducting the deposition pays for the court reporter that they use for the deposition. When I say the attorney pays for it, the client pays for it, but the client of the attorney conducting it.
John: Right. Now, typically a couple that gets divorced will have separate attorneys. So, they’d be paying those attorneys separately. But some of the experts that you mentioned, like the expert forensic accountant or something like that, is usually a third party again, would the cost of that be shared between the two people that are getting divorced?
Heidi: Typically, it’s the moneyed spouse that will get hit with these costs. If, for instance, there’s a non-moneyed… When I say moneyed spouse, I mean the main wage earner, worker spouse, so to speak, as opposed to the housewife who’s not working and is at home taking care of the household and the children. Yes, they can defer to the moneyed working spouse to pay for these fees and sometimes motions are filed to have that spouse pay for the fees. You can agree and stipulate they’re going to pay for the fees or how you’re going to pay for the fees.
Sometimes, there are other people. For instance, let’s talk about if you need a guardian ad litem, which is usually an attorney or there are some non-attorney guardian ad litems also, but they’re appointed by the court to represent the best interest of the child. Typically, if there’s young children involved and there’s conflict, a judge will seek to have a guardian ad litem appointed and that attorney will get paid and sometimes the court will allocate how they’re going to get paid between the parties, because now you’re dealing with the best interests of the child. So, both parties should pay, so to speak.
Sometimes, even if you’re not the moneyed spouse or the wage earner, they’ll allocate the price of payments 70-30, 80-20, and sometimes 50-50 even if you’re not working. But usually if there’s a family and there’s only one working parent, it’s usually the working parent that’s going to get hit with the costs. But you can allocate or you can stipulate, it doesn’t necessarily have to be 50-50 or 100% falling on the shoulders of the moneyed earning spouse also. Because a lot of these, as you could well imagine, start adding up.
Heidi: T hey can also be subject to reallocation. So, a court can order any of these third parties to be paid by one of the spouses subject to reallocation at trial. The problem with that is, by the time that you get to the trial or get to the settlement, those are subject-to-reallocation steps, sometimes it’s not that they fall through the cracks, but they’re not the most important aspect of the settlement or the trial.
So, either a judge, in determining things, may not be focused on that as heavily as other issues or the parties themselves may not. So, subject to reallocation is frequently done, because of the extent of these costs. But you have to remember that, don’t let that subject-to-reallocation aspect fall through the cracks at the end. Make sure it’s considered as heavily as something else, because it could be a lot of money that is not getting credited back.
John: Obviously, the costs will add up the longer that a divorce might take. How long does a divorce typically take, generally?
Heidi: Well, the courts would like to see that you’re in the realm of six months to a year. When they start looking at more than a year, they’re going to start trying to put more pressure on you to get it wrapped up. There’s a lot of aspects in the court system that assist the judge in moving the case along. But in complex cases, you could have discovery, in a complex case, it could easily take months and months.
Because imagine discovery demands generally get responded to 30 to 60 days later. So, you generate your demand. All of us lawyers, whenever we generate discovery demands, we have the kitchen sink in them. Everything that you could possibly imagine to discover, we all put it in our demands, because if you don’t, you don’t get everything you may need. So, we all have these long, very detailed demands for discovery and it’s basically asking for everything and anything.
Then there’s a time period, usually a typical window is three to five years of documentation. The reason for that is because forensic experts, forensic accountants usually use five years or three to five years in their determinations. So, that’s what we use. Then there’s documentation, obviously, they could go back well beyond three to five years. If you’re asking for your contract to purchase your house that you’ve now lived in for 15 years, you still want that document. It’s beyond the three to five-years time period. But you still need that document. So, it may go beyond those parameters, time parameters.
The three to five years is generally when you have bank accounts, something with recurring monthly statements, those kinds of things. When it’s something specific like a painting needs to be valued or you have a purchase from a painting or a house, those are documents that are not necessary in the window of three to five years, but are specific to the item in category, which you also asked for in discovery. So, discovery can take a long time and be very costly.
And there’s depositions. I try to stay away from doing depositions unless I really know the case is going to be contested and go to trial, because depositions can be very costly, very expensive, and the transcript’s expensive and you can get the documents by generating a paper demand and 30 to 60 days later get the document yourself and make your own interpretations. If you want to narrow down testimony, because you know that you’re going to a trial, that’s when, in my mind, a deposition becomes more important. Of course, there are lawyers whose style is to always take a deposition. No harm, no foul, I’m not going to criticize. But if you don’t need to lock in testimony, because you’re not going to trial and use it for impeachment purposes and also direct at a trial, why do you need a deposition?
You may need a deposition if you still don’t have all the discovery you need. So, you want to be more specific and it’s easier to look the other litigant in their eyes and ask them the question and get the answer and see the demeanor and it leads into a host of all other stones that get unturned when you do a deposition. Sometimes, a deposition is important, also, not only for impeachment purposes of trial, but if the litigant hasn’t really been forthcoming and providing all the discovery, sometimes you do need the depositions so you can narrow it down and really use it as a discovery gathering device. But most of the time, I like to use depositions not as a discovery gathering device. I can do that with a demand. But more for trial prep. Does that make sense?
John: Yeah, absolutely. Yeah. What are some of the circumstances that might raise or lower the cost of the divorce? Obviously, you just mentioned discovery being one, if one of the parties happens to be the owner of a large corporation or something like that and you have to look into the value of that large corporation, that could take a long time.
Heidi: And there could be depositions of third parties too that are involved like partners. And a lot of time, if you have an affair, in New York, depositions are only financial in nature. I practice in New York and Connecticut. In New York, your discovery is only financial in nature, you can’t start asking about custody questions and things like that. Superficially, you can, but they’re not meant for anything other than primarily financial-related issues. If a custody issue or a visitation issue turns on financially, you can get it in and start asking.
But, for instance, if you want to start asking questions about your affairs in New York, you’re not going to get very far at a deposition, because as practitioners we know, it’s not kosher. In Connecticut, you can. So, a lot of times litigators will… Attorneys, not necessarily litigators, but attorneys will depose the girlfriend. That’s also because marital fault can be an aspect if you’re having an affair and that could impact, maybe you’ll get a judge to consider, “Hey, this was not great, I’m going to give a little more alimony or a little more division of property to penalize the other spouse for having all these affairs.” It usually has to be more than one. I’m going to be honest with you. Because any person can… Judges have affairs, they’re all human.
John: So, you’re kind of allowed to get away with one.
Heidi: Well, it doesn’t mean an attorney on the other side won’t try the game or the aspect of it, but we’re all human. Unless it’s something really significant or you’ve done something wrong, really wrong about it, if you’re starting to buy that girlfriend yachts and fur coats and emptying out all your accounts, yeah, one could do it.
John: Right. Does a contested divorce generally cost more than an uncontested divorce? Does one that involves child custody disputes cost more?
Heidi: Contested obviously does, because that means you’re litigating. Basically, you’re before the court periodically on motion practice, and that’s usually what’s going on. Motion practice until you’re done with the case. And the case either gets tried or you settle by agreement. At any point in time, a case can resolve itself. So you may be litigating nonstop and being in dispute about everything and then, all of a sudden, you decide to resolve, that happens.
I can tell you, most cases don’t, at the end of the day, get tried. You can imagine if every divorce case got tried, our court system wouldn’t be operational, it would not. The entire docket would be divorce cases, but fortunately that’s not the case. There is a high percentage of divorces, but most of them, luckily, because of the power of the dime, money does speak. So, there’s a point where what are you gaining by litigating your case?
John: Right, there’s some Incentive there to wrap it up.
Heidi: There’s got to be an analysis of plus minus, “What am I gaining by continuing to litigate versus resolving? Am I going to, at the end of the day, have a decision but no assets because I’ve spent them all? Or they’re all going to go to the lawyer?” Which is why I always am very clear to clients how much it costs to go to court and litigate things.
I always try to get them to resolve and settle, not only because parties themselves can certainly resolve their disputes far better with greater detail than a judge wearing a black robe, who has 300 cases on their docket that they have to decide. They’re not going to give the details or pay attention the way you would, and you’re not going to get the… So, it’s always best to resolve your case that way by stipulation and agreement than to leave it up to a third party with a robe.
John: Right, absolutely. Like you said, you’ve got a big incentive there to try to wrap it up as quickly as possible. Even if you had to settle for maybe a little bit less than what you wanted, you probably end up with more in the end than you would if you went to trial, say.
Heidi: Yes. It’s no fault of the attorneys. Sometimes people just want to argue and keep it going, can’t resolve. They hate their spouse so much. It frequently will happen that they’re arguing about something that’s far less in value than the legal fees that they’re spending and they just cannot stop. That happens all the time. It’s not the attorney’s fault, because they’re trying to settle the case, but the party… either one party doesn’t want to settle the other party… It could be one party or it could be both parties. That’s when you have to take a step back and say, “Stop. just stop.”
But it doesn’t always work. Do I have cases where people spent more in legal fees than what they ended up with? It does happen, because of what I just described. The emotion, if you could take the emotion out of a divorce, most of the cases will settle. But there’s a lot of emotion and sometimes it’s very difficult to take that out of the case.
John: Sure. Are there times when it might actually be better to postpone getting divorced until later in order to maybe lessen some expenses or get some benefits from… if you stay married for a certain period of time, maybe you gain some benefits by just staying married instead of getting divorced right away?
Heidi:So, if you want to share in your social security of your spouse, you have to be married for 10 years. That’s an example. Or another example is what if your spouse works for a company that’s going to go public and they have an equity interest? You do not want to get divorced until that company goes public, right?
Heidi: Because in New York, there’s a cutoff date. If that company goes public afterwards, you don’t gain in it. But in Connecticut there are no cutoff dates as for filing of the divorce. So, you could still, theoretically, in Connecticut, benefit even if the company went public later. That’s where you may want to look for someone like myself, working in both jurisdictions, and if you have and can bring a case in either state, you may look at a state and say, “Wait, is it better for me to bring it in Connecticut or New York?” That would be an example of maybe if the company’s going public, you’d be better off filing in Connecticut rather than New York. Right?
Heidi: With a cutoff date. Then New York has separate property, Connecticut doesn’t. So, if you can have separate property issues that are compelling, you may want to bring it either in New York or Connecticut, depending on what side of the coin you’re on with the separate property. If you want to keep your separate property, you want to bring it in New York, not Connecticut. That’s an all property state that has no separate property and doesn’t consider it.
John: If you’re considering getting divorced, you might want to talk to an attorney like yourself privately and just outline some of those details so that you can decide, “Well, hey, is now the right time to actually file or is it worth my sticking it out and waiting a year or two or something like that?”
Heidi: Absolutely. I get all those calls all the time.
John: Right. All right. Well, that’s really great information, Heidi, thanks again for speaking with me today.
Heidi: Thank you.John: For more information, you can visit Heidi’s website at ctnydivorcelawyer.com or call the law offices of Heidi E. Opinsky, LLC at 203-653-3542.