Written by Joel Kranc

Wednesday, November 21st, 2018

Going through divorce is stressful, no matter how mutual it may be or how amicable the parties involved remain.

One of those stresses comes from financial hardships. Divorce is expensive and costs will be incurred no matter what, but there are ways to minimize the cost and financial stresses of divorce.

The Costs

When parties can agree to terms easily and amicably without any proceedings or contested issues, fees will likely be on the lower end of the spectrum.

According to a 2018 survey in Canadian Lawyer Magazine, uncontested divorces can range in cost between $1,400 and $1,600, whereas contested divorces can range between $7,500 and $12,500.

When the same couple can't agree to terms such as splitting of assets, child support, or alimony, according to that same survey, the average cost for a contested divorce rises to $13,638 nationwide.

When couples separate, their expenses "can increase by as much as $20,000 to $30,000 a year because of the need to support a second household," according to family mediator Stephen Rosenfeld. That amount includes loss of discounts received (such as discounts for multi-car insurance) and the need for duplicate items for children at two homes (such as a computer, Internet access, and clothing), as well as the possibility of child support payments and spousal support payments.

Lines of Communication

Although it's obviously a difficult time where two people have drifted apart or find it hard to get along, it's still worth considering co-habitating for as long as possible. In places like Ontario, for example, a year must pass after the separation agreement before divorce proceedings can occur.

If living together amicably is possible, it will save both parties money in the long term and reduce the burdens of moving and finding a new home. If there are children involved, it may also ease their transition to a two-home environment.

Before the Lawyer

If possible, gather as much information as possible before hiring anyone. The Internet has an abundance of free information and can lighten the need for lawyers or consultants, at least on the front end of the process.

Mediation and arbitration are cheaper and perhaps less stressful alternatives to court. If the two parties can agree to one of those methods of settlement, they'll probably be better off in the long run.

Retirement Issues

Long-term financial planning will be affected by divorce. Current pension and/or retirement savings will likely be split and affect future savings. Things like pension sharing that allow for some tax savings benefits will be lost by separation or divorce.

If you know divorce is imminent, it's best to speak with a financial planner or retirement expert on options for future savings and how best to account for losses that will take place in the short term. These costs can't be avoided but can be better planned for with the right guidance and advice. This too can come with consulting and planning fees. It's best to talk to a number of planners to assess their own fees and what planning for a future nest egg may look like.

Because the process starts with the desire to break up, there is no way to avoid certain unpleasant elements both on the emotional and financial sides of divorce. There are, however, ways to lessen both burdens with simple communication and a desire to co-exist and/or co-parent in a still meaningful and fruitful way. Part of that communication will allow for a smoother and (hopefully) a less expensive transition.