When people begin the divorce process, one of the first financial questions is often, “How can I keep the cost of divorce as low as possible?”
Divorce can be expensive, and legal fees are often one of the largest costs associated with the process. If you and your spouse are communicating well and believe you agree on the major issues, it may seem logical to avoid attorneys altogether.
As a financial professional specializing in supporting the divorce process, I understand the desire to control costs. I also regularly see the financial consequences of decisions that were made without a full understanding of the legal and financial implications. While not every person needs full-service legal representation throughout the entire divorce process, the appropriate level of legal involvement depends on the circumstances.
In this post, we’ll explore what to consider if you are deciding whether or not to proceed with legal counsel, and help you understand what you may be giving up as you make the decision.
A significant number of people represent themselves in family law matters. National research has found that approximately 70% to 80% of family law cases involve at least one self-represented party. In uncontested cases, the percentage of couples proceeding without attorneys can be even higher.
But an uncontested divorce does not necessarily mean a simple divorce. The spouses may agree on the broad terms while overlooking important details related to:
Agreeing on the general outcome is not always the same as understanding the legal and financial consequences of how that outcome is structured.
One of the most common reasons people avoid hiring an attorney is cost. It is understandable that someone going through a financial transition may not want to spend tens of thousands of dollars on legal fees. However, the cost of legal advice should be considered alongside the potential cost of making an uninformed decision.
For example, an agreement may appear to divide assets equally but create very different after-tax outcomes for each spouse. A retirement account and a taxable investment account may have the same current value but very different tax characteristics. A house may have significant equity but also create future costs, including maintenance, taxes, insurance, and the potential need to refinance.
For example, a couple may agree that one spouse will keep the marital home. But important questions may remain:
Similarly, a couple may agree to “split the investments” without addressing how the accounts will be valued, which specific assets each spouse will receive, or how any tax consequences will be handled. These details can significantly affect the financial outcome.
Another common concern is that involving attorneys will make the divorce more contentious. However, this is not necessarily the case. The role of an attorney is to provide legal advice and representation. How that attorney works with the client can vary significantly. The right attorney for a cooperative divorce may be very different from the right attorney for a high-conflict case. If your goal is to reach an agreement efficiently, choose professionals who understand and align with that objective.
The attorney does not have to take over the entire process. In fact, many people may benefit from receiving legal guidance while remaining actively involved in negotiating and making decisions about their own divorce.
Divorce requires each spouse to have a full and accurate picture of what exists, including assets, debts, income, and benefits, before any agreement can be considered fair. Without legal guidance, it can be difficult to know whether you have actually received complete information, or whether you even know what questions to ask.
For example, when reviewing a proposed settlement on your own, you may not think to ask:
An attorney can help ensure the disclosure process is complete, request documentation when something looks incomplete, and help you understand what you're looking at once you have it. Skipping this step to save money upfront can be far costlier later. Post-decree conflict, or going back to court because an asset was missed, misvalued, or misunderstood, often costs significantly more in legal fees than the transparency process would have cost the first time around, on top of the stress of reopening a case you thought was closed.
Even in the most cooperative divorces, the court system itself can be difficult to navigate without guidance. Family law procedure varies by jurisdiction, and the requirements for filing, disclosure deadlines, and required forms are not always intuitive, especially while also managing the emotional and logistical demands of the process itself.
Common pitfalls for self-represented individuals include:
An attorney (or in Colorado, in some cases an LLP) can help you understand what the court requires, keep the process moving efficiently, and reduce the chance that a procedural misstep turns into a substantive problem.
Even limited-scope guidance, someone to review your filings before submission, or explain what a hearing will involve, can prevent the kind of delays and frustration that make people believe going without an attorney saved them money, when in fact it extended the process and increased their costs.
There is a middle ground between handling everything yourself and hiring an attorney to manage every aspect of the divorce. Limited-scope, or “unbundled,” legal services allow an attorney to assist with specific parts of a case.
For example, an individual may hire an attorney to:
This approach may allow someone to receive targeted legal guidance without paying for full-service representation throughout the entire process.
Colorado also has Licensed Legal Paraprofessionals, or LLPs, who may provide certain legal services in domestic relations matters within the scope of their license. For some individuals, an LLP may be an option to consider depending on the specific legal services needed and the circumstances of the case.
As a financial professional, I understand why people want to minimize the cost of divorce. Legal fees are a significant expense, and not every case requires the same level of legal representation. However, the cost of legal guidance should be evaluated in the context of the financial decisions being made.
Before deciding to proceed without legal counsel, consider whether a consultation, limited-scope representation, attorney mediation, or another form of legal guidance may be appropriate for your situation. The goal is not to make your divorce more complicated. The goal is to make sure that you understand the financial and legal decisions you are making before they become final. Contact me to talk through how I can provide the financial support you need during your divorce.