The Common Sense Divorce

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Gail Vaz-Oxlade's Guide To:

The Cost of Divorce

Financially Smart Divorce

For more than 25 years you have witnessed Gail Vaz-Oxlade's trademark straight-up money wisdom, both on Radio and Television, most notably as host of TVs Till Debt Do Us Part, Princess and Money Moron. Gail is a best-selling Canadian financial author.

Gail Vaz-Oxlade's Guide To

The Cost of Divorce

Financially Smart Divorce

The Cost of Divorce

Should I Pay For My Spouse's Divorce Fees?

You and your spouse have recently made the decision to separate. You’ve done your research and have settled on a family mediation as the process you want to use to create your separation agreement.

But what do you do when the cost of divorce is too much and your spouse says they cannot afford to participate in mediation? How can you avoid being dragged into a costly, lengthy, and nasty court battle?

Though it may seem counter-intuitive, many separating couples have solved this problem by having one spouse pay for the other’s share of the mediation costs at the beginning of the process. Your first thought might be, “why would I want to foot the entire bill for something we participate in equally?”

There are a number of reasons why paying your spouse’s mediation fees benefits you:

Your spouse can repay the loan as part of the asset division

First and foremost, you can be reimbursed at the end of some legal processes like mediation or collaboration. When you separate, you and your spouse will divide your shared assets and debts in a process referred to as the “equalization of net family property”.

Your spouse’s share of the divorce process cost that you have paid will be added as a debt in your spouse’s name and the equalization payment to each of you will be adjusted to reflect that. Think of it as a short-term loan to your spouse that will be re-paid at the end of mediation.

Rather than receiving interest on the loan, you receive the confidentiality, privacy, and control of the process that mediation provides.

A Mediation process provides better cost-certainty

The average contested cost of lawyer led divorce in Canada is over $27,000. And that is before going to trial, where costs can soar to upwards of $45,000. The retainer fee you will need to pay your lawyer to go to court will start at the same cost as your spouse’s mediation fees, and that retainer fee will not be reimbursed at the end of the process.

A lawyer’s retainer typically only covers initial legal costs, with fees rising the longer your case goes on. Given that the average length of a contested divorce is one to two years, it becomes easy to see how a simple dispute can turn into a $30,000 court case. A successful mediation process, on the other hand, averages about three to five months.

Paying your spouse’s portion of the cost of divorce mediation is an investment in the shorter timeline and risk-averse nature of mediation.

The Cost of Divorce: It shows that you take mediation seriously

Covering the cost of divorce and paying your spouse’s mediation fees is a good faith gesture that shows that you value the mediation process and have a legitimate stake in the outcome.

Your spouse knows that you are serious about sitting down and negotiating a solution with a professional, without escalating the tension by heading to court. Starting off the process on amicable terms is a far better option than entering mediation after the civility has evaporated beyond repair.

When your spouse informs you that there is no room in their budget for mediation, think long and hard about your other potential options. The additional up-front cost of paying for your spouse may save you thousands of dollars, and months of headache, over the long-term.

The Cost of Divorce 1

The Top 3 Divorce Mistakes People Make

1. Hiring a lawyer before understanding all their negotiation options

2. Succumbing to emotions at the expense of their financial future

3. Not starting with a smart, legal and financially savvy go-forward plan

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