When the cost of divorce is discussed, it usually refers to the actual financial cost of attorney’s fees involved in the process. In fact, divorce has three distinct categories of cost that should be considered.
1. Emotional Cost
Divorce is rated as the second-highest of all life stressors by the Holmes-Rahe Stress Inventory. Divorce creates a maelstrom of emotions that create significant pain and trauma. The stress of a divorce can impact your physical health and create sleep loss, addiction, anxiety, depression, and can lead to illness. The impact should not be underestimated. It is important to recognize the potential effects and take proactive steps to care for yourself through therapy, exercise, social contact, medical care, and other self-care avenues. You may also experience changes in friendships and the loss of a relationship with your in-laws.
Children are deeply impacted by divorce, and it is wise to find a respected therapist who can help them through the process. Keeping the impact on the children in mind is an important consideration when planning the strategy and approach to your divorce.
Divorce also impacts other family members, such as parents who may have a deep connection with their daughter or son-in-law and experience a loss through the divorce. Supporting and standing by a child who is going through a painful divorce is emotionally draining and challenging as well. Other family members such as siblings may also find the divorce difficult. Close friends may feel they have to choose sides or that they are losing a friend.
The emotional cost of divorce is deep and wide-ranging. However, it is important to remember that this short-term cost must be weighed against the long-term prospect of continuing to live in an unhappy, unsafe, or loveless marriage.
2. Financial Cost
The financial cost of divorce is generally understood as part of the process, but there are actually many layers to this, some of which are not well-known.
- Legal fees. Legal fees are an obvious component of the divorce process, but may also incorporate fees for other experts such as business evaluators, real estate appraisers, tax analysts, child custody evaluators, accountants, and more. There are also court fees as well as costs such as transcripts, private investigators, visitation monitors, and others.
- Increased living expenses. This is a cost category that is unexpected for most people. While the case is ongoing, you and your spouse will have increased living expenses, which may double your normal living costs because there will be two full-time residences. One spouse will likely move either to a home already owned or may purchase a new home and need to decorate, furnish, and supply that new location. There will be the expenses of maintaining two homes moving forward, including staff, utilities, services, and food and alcohol costs. Additionally, divorce often brings lifestyle changes that may involve new clothes and jewelry, dining out, vacations, new activities, hobbies, and therapy costs.
- Division of assets and debts. The outcome of a divorce is distribution of marital assets and debts. The total of marital assets is divided between you and your spouse using New York’s equitable distribution rule. There is no way to avoid a diminution of your net worth through the divorce process. This can be managed by implementing a prenuptial or postnuptial agreement at the time of the marriage or before the divorce.
Keeping a close eye on legal fees, expert costs, and living expenses can help manage the costs divorce can create.
3. Business, Career, and Brand Costs
Divorce impacts every area of your life and can be expected to have repercussions in your business life.
Business. If you own all or part of a business, the divorce can have a massive impact on the business. If the business, or the increase in growth of the business, is a marital asset, the entire business’s worth will need to be valued as part of the divorce procedure. This can be a very disruptive process as an outside evaluator will need access to your books and may have many requests for information.
This kind of disruption is distracting not just for you, but also for employees. It may also create uncertainty for vendors and customers. There may be concern about what will happen to the business after the divorce, such as whether it will be sold. If your spouse is an active participant in the business, a change in roles will influence how the business operates in the future.
- Career. No matter the field you are engaged in, divorce can impact your productivity, focus, and drive. The divorce proceedings can make it difficult to travel, and the freeze on major expenditures can make it challenging to make changes or invest in your career.
- Brand. If you are in a public-facing role of any kind, the news of your divorce has the potential to negatively affect your brand. Public accusations by your spouse or leaks can lead to harmful press. Even the perception that you may be somehow at fault, unfair, inappropriate, thoughtless, or unfaithful can significantly impact your role and career.
It is important to talk with your attorney about these areas of concern. The business impact can be managed with delicate handling and clear messaging. The impact on your career can be controlled by using a legal team you trust so that you can focus on your job and not the divorce. Damage to a brand can be mitigated by using a law firm that is familiar with the role of brand and can coordinate with your PR team.
The costs of divorce can cumulatively be high, but careful strategy by your trusted legal team can minimize the impact the divorce will have on all aspects of your life.