From Mediation to Litigation: A look at how much a divorce costs.

divorce costs

Let’s take a look.

If you’re wondering how much a divorce costs, you’re not alone. In fact, that is probably one of the first things people think of when they contemplate ending their marriage.

And for this question…we have a very concrete answer for you: It depends on the situation.

Yes, unfortunately each scenario is different. But that doesn’t mean that we can’t give you a better idea of what might make the difference between a reasonable and costly divorce.

  • Substantial or complicated assets may contribute to a higher cost.
  • If you own a small business and take liberties with deducting your personal expenses as business expenses on your taxes your divorce cost will be higher.
  • Significant separate property claims between you and your spouse could have an impact.
  • Unproductive and disrespectful discussions with your spouse can also drive the cost up.

Other issues.

In our experience the most expensive divorces are fought by two parties who HATE each other for one reason or another. Sadly, the legal system is structured in such a way that these two individuals are often more angry at the end of the process than they were at the outset. It also depends on the attorney’s hourly rate and if he or she is inclined to encourage a settlement. Hiring the most expensive attorney in town known for being a shark will increase your divorce cost.

How we can help.

Wellspring Divorce Advisors coaches clients to think of their potential divorce cost as a continuum from highest to lowest rather than absolute dollar terms.

Ranked below are your process options ranked highest to lowest in cost. We have seen litigation cases cost millions of dollars in fees and mediation cases with equivalent amounts of assets done for $15,000.

  1. Litigation
  2. Adversarial with Settlement
  3. Collaborative Divorce
  4. Mediation
  5. Pro-Per

Click here for a brief overview of your main options or call us for an overview and consultation to help you choose. Our experience has shown the engagement with Wellspring Divorce Advisors will reduce your overall cost significantly.

One more thing.

A failed mediation can easily land you in a litigation model and cost even more. Make sure you understand mediation before opting in. The model is often misunderstood and full of less than reputable professionals.

Retirement Accounts & Divorce: Why you need a QDRO


QDRO: Qualified Domestic Relations Order

A Qualified Domestic Relations Order (QDRO) is the court order required to give notice to a retirement plan administrator that an Alternate Payee is entitled to a portion of the plan. Without a QDRO the plan administrator cannot legally make payments to the Alternate Payee.

Retirement plans such as 401(k)’s and defined benefit pension plans are often among the largest assets to be divided during the division of a martial estate. Many of these plans are governed by a set of federal laws known as the Employee Retirement Income Security Act of 1974 or ERISA. ERISA allows an Alternate Payee such as a former spouse to receive a portion of the employee’s benefits with a court order.

Who should draft my QDRO?

The drafting of a Qualified Domestic Relations Order is an important step in the divorce financial planning process and should be drafted by an attorney familiar with this subset of legal practice.

Financial planners have specific and far reaching knowledge of retirement plans and the underlying laws that govern them but are ill-equipped for drafting the actual Domestic Relations Orders as they are usually not attorneys.

Do I REALLY need an attorney?

For a QDRO to be valid and accepted by both the court and the plan administrator it must contain specific requirements under the law as well as be tailored to that specific plan. Retirement plans may even reject court certified orders that were not pre-approved by their own staff. For this reason it is necessary for a draft to be sent to the plan administrator for pre-approval prior to seeking court certification.

Wellspring Divorce Advisors suggests the qualified domestic relations order be drafted and pre-approved prior to finalizing the global financial agreements. We have seen many individuals still fighting to get their share of the retirement plans awarded to them years after settlement because the other party refuses to sign. See more on the QDRO Process here.

The Deposition: How to keep surprises to a minimum during your divorce.


What is a deposition?

In a deposition, one party or that party’s lawyer conducts face-to-face questioning of the other party or a witness to the dispute.

The person being questioned (the “deponent”) must answer under oath, and the answers are recorded by a court reporter or possibly on video for later use at trial. If the deponent cannot testify at trial, the questions and answers might be read as evidence. If the deponent does testify and gives different answers at trial from those he gave during the deposition, the questions and answers can be used to show the jury that the witness changed his story bringing his credibility into question.

When a witness loses credibility it will tarnish the believably of his entire testimony.

When should a deposition be used?

Depositions can be under utilized in divorces…but possibly for good reasons. In situations where parties are amicable and have equal access to financial information, depositions are a waste of time and money. They should be used only in cases where the opposing party or their financial expert has information you want and need and are not freely providing it.

Some jurisdictions refer to a deposition simply as “testimony before trial” which is a much more descriptive term.

Why is a deposition important?

A deposition is a great tool to find out, in advance of hearing or trial, what a witness is likely to say in the future. You can find out:

  • What a financial expert testifying for the opposing party will testify to at the hearing.
  • How they rendered their opinions.
  • If they have any financial documentation not yet in your files.

All of these realizations can and should assist your attorney and financial expert in preparing your case before it is argued in front of a judge.

How can Wellspring Divorce Advisors help with this process?

Your Wellspring Divorce Advisor can even attend the deposition of your former spouse or their financial expert and assist your attorney in questioning the witness. Depositions can be a powerful means of gathering financial information when one party is at a disadvantage.

You Need a Game Plan: 10 strategies to help you during your divorce.


Throughout our experience as Certified Divorce Financial Analysts we have developed a passion for strategic thinking during financial negotiations of divorce. Every case presents different challenges, opportunities and client goals. No two negotiations are the same but we find some financial strategies during divorce important to consider in every case.

Here are 10 strategies to help you during your divorce.

1. IRS rule 72(t)

This allows hardship withdrawals without the 10% penalty from 401(k) plans during divorce. Consider this strategy to help with cash flow problems during dissolution proceedings.

2. The Government Pension Offset and Windfall Elimination Provision

These are federal Social Security rules that often unexpectedly reduce Social Security retirement benefits in divorce situations and may cause inequity.

3. Consider that an apples to apples comparison may not be possible…

…for before tax and after tax dollars from an individual brokerage account versus an IRA. Agreeing to an equal offset of accounts with different tax ramifications may result in inequity.

4. Know the value

Comparing the present value of a currently available liquid asset such as a savings account versus the future value of a non liquid asset such as a pension may result in inequity.

5. Child contingency and Alimony recapture laws

These are hard to analyze and often missed in setting support awards but can cause unexpected tax ramifications of great magnitude if left without review.

6. Capital gains

Unrealized capital gains that may cause future taxes should be included in estimates of value when considering asset division. Agreeing to a division where each party receives an asset of equal value but one has a large capital gain built in will result in inequity.

7. Know what has cash value now

Dependency exemptions and tax filing status may have real cash value now and in the future and can be used as bargaining chips for financial settlements.

8. What about the life insurance?

Life insurance placed as security for support payments should be positioned before a final settlement is reached to ensure a policy will be available with an efficient cost structure.

9. Retirement plans

Qualified Domestic Relations Orders necessary to divide retirement plans should be drafted and approved by the plan administrator prior to the divorce being final to avoid delays common post divorce.

10. Don’t forget the real estate

Consider the advantages of deferring capital gains taxes on real estate assets by using a 1031 exchange or converting a rental property to a primary residence for tax purposes.


As your partner and with a little guidance from attorneys, we will help you reach an equitable solution. Call Wellspring Divorce Advisors today to begin the journey towards your future.

Alimony Recapture


What is Alimony Recapture?

Alimony Recapture is an effort by the IRS to block the disguise of a property settlement in divorce as tax deductible alimony.

Internal Revenue Code requires recapture of deductions taken for alimony payments into the income of the payer spouse if alimony decreases too fast in the first three calendar years of permanent support. The amount to be recaptured is determined by recomputation of the payer’s tax deductible payments.

  • Recomputation occurs once in the third post separation year.
  • The recaptured amount is includable in the income of the payer spouse in the third post separation year and the same amount is an above the line deduction to the recipient spouse in the same year.
  • The amount that must be recaptured in the third post-separation year is the sum of the excess payments made in the first post-separation year plus the excess payments made in the second post-separation year.


Alimony Recapture DOES NOT APPLY where:

  1. The payments fluctuate outside of the payer’s control because of a continuing liability to pay a fixed percentage of income from the earnings of a business or property or from compensation from employment or self-employment.
  2. The alimony payments terminate due to death of either party or remarriage of the recipient before the end of the third post-separation year
  3.  Payments are pursuant to a temporary order.

If alimony or separate maintenance payments decline or cease during a post-separation year for any reason other than one contemplated by these exceptions (including a failure by the payer to make timely payments, a modification of the divorce or separation instrument, a reduction in the support needs of the payee, or a reduction in the ability of the payer to provide support), excess amounts will be subject to recapture.


Sound complicated? It is. Get an expert to help you avoid costly errors and don’t assume your attorney is looking out for this kind of financial blunder.