10 keys to a truly cheap divorce

By Forbes.com

Most divorces these days are nasty, brutish and all too long. Not to mention damned expensive.

The average cost of a wedding is just under $28,000, according to Conde Nast Bridal Group, publishers of Brides, Modern Bride and Elegant Bride magazines. That is double what it was 16 years ago.

The average cost of a divorce? "That's like asking how much a car costs," says John Crouch, a family law attorney who practices in Arlington, Va. Estimates on the average cost of a divorce in the United States range from $15,000 to $30,000. (See "How to avoid divorce court.")

Where does all that money go?

Guess who gets the dough?

The bulk of it, predictably enough, goes straight to the attorneys. Matrimonial law work is currently a staggering $28 billion-a-year industry. Court fees can also add a hefty sum to your divorce bill; a mere two-day trial can set you back as much as $25,000 (less-expensive options, like formal arbitration, still run between $5,000 and $10,000). But if you're looking to reduce those costs or to avoid them altogether, you've got a few alternatives.

The simplest -- and the cheapest -- way of handling divorce proceedings is to do all the negotiating and paperwork on your own. Web sites like Divorce.com, DivorceOnline.com and CompleteCase.com offer an array of information and services to assist you, from state-specific legal forms to downloadable divorce kits. If your finances are simple, you don't have any shared debt and you and your spouse can reach an agreement on custody arrangements, this may be an attractive option, and it will generally run you between $50 and $250.

Another inexpensive option for those whose divorces are relatively amicable is mediation. During mediation, the couple hires a mediator trained in conflict resolution and family law (and often, but not always, a lawyer) to oversee their negotiations. "The mediator facilitates discussion," says Sam Margulies, an attorney and professional mediator with practices in New Jersey and North Carolina. A mediator can advise you about potential financial and custodial arrangements, and will help to reopen the discussion if things break down. "It changes the role of a lawyer from surrogate to adviser," Margulies says.

Mediation reduces your divorce bill because it reduces your billable hours -- you and your spouse shoulder the burden of gathering and sharing information yourselves, and while your mediator's hourly rates may not be any cheaper than those of your attorney, you'll spend far less time together. You and your spouse can, nevertheless, opt to retain separate lawyers in order to review the final settlement. Margulies estimates that the average mediated divorce should cost less than $5,000.

Collaborative law is a similar -- and increasingly popular -- approach to divorce. During collaborative law negotiations, both you and your spouse will hire lawyers, but they will be committed to resolving your differences without resorting to any form of litigation or any adjudicatory procedure. Here, too, mutual trust is imperative: "It's not for people who have something to hide," Crouch says. Collaborative law is not the cheapest way to go -- Crouch estimates it might cost an average of $3,000 per spouse -- but it still represents significant savings over the traditional adversarial method.

Pick the right mediator

Those who favor collaborative law over mediation may worry that the mediator is not truly impartial. But some attorneys are concerned that if the husband and wife let their lawyers do all the talking, they will never really learn to negotiate on their own. "Lawyers aren't trained to be negotiators," Margulies says. And if you and your spouse don't learn to negotiate, the likelihood that your settlement will last is greatly reduced.

If you're stuck in traditional divorce proceedings, where each party has hired a lawyer to represent them in a court battle, there are still things you can do to reduce your legal bill. By far the most important thing is to communicate: Disclose your assets, answer any questions and provide all documents that are required. "With that there's not much else for a lawyer to do," says attorney Violet Woodhouse, author of "Divorce and Money: How to Make the Best Financial Decisions During Divorce."

You should also make sure you've done your homework before a meeting with your lawyer. "Use lawyers for legal matters," urges Arlene Dubin, a partner at New York's Sonnenschein Nath & Rosenthal and author of "Prenups for Lovers: A Romantic Guide to Prenuptial Agreements." Don't make your lawyer wait around racking up billable hours as you scramble to find documents or look up information.

If you and your spouse must go to court, try to keep things as neat as possible and avoid getting trapped in an endless cycle of litigation.

"It'll just hurt everyone in the long run," Crouch says.

Avoid these mistakes

Getting a divorce is a messy business, both personally and financially. Don't be in such a hurry to reach a settlement that you make these costly financial mistakes:

Having unrealistic expectations. "Divorce will put a cramp on your lifestyle," Woodhouse says. One household is about to be split into two. Unless you're a rock star -- or a Rockefeller -- expect money to be a little tight.

Not communicating. If you don't share information with your spouse or your lawyer, you'll just end up paying for the legal work it will take to get it.

Getting into an endless battle. Turning the courtroom into a battleground will drain your emotions and your finances. Pick your battles wisely and "don't end up paying for your lawyer's kids' education," Crouch says.

Getting hung up on the numbers. A fair split is not necessarily an even split. Woodhouse counsels her clients to assess their tolerance for risk before deciding how to divide their financial assets. One spouse may not mind taking over a risky stock portfolio; the other may prefer the relative security of a bond fund.

Focusing on the present and not on the future. Make sure you understand the financial implications of your decisions. Rather than accepting a BMW worth $35,000, for example, consider taking a mutual fund with the same current market value. The car will depreciate; the fund, if chosen wisely, probably won't.

Forgetting to assess tax. Don't forget to factor in the tax costs of every financial decision you make. For instance, two stock portfolios of seemingly equal dollar value might really be worth completely different amounts, depending on capital gains.

Overlooking important information. In the struggle to keep your divorce simple, make sure you have information on absolutely everything that will affect your financial future: all assets, investment funds, retirement pensions, etc.

Failing to untangle all joint finances. Keep your finances mingled and your financial future could be jeopardized if your former spouse defaults on payments, commits fraud, goes bankrupt or becomes disabled. You might also be liable for any debt that your spouse has incurred under your name. Make sure you have worked out a way to cut or minimize all financial ties before the divorce rather than after it.

Failing to take into account the amount of time you'll need to get your career back on track. If you gave up your career when you got married, it probably won't be easy to jump back into the work force. Don't be surprised when the costs, both financially and emotionally, of resuming your old business turn out to be greater than you'd thought.

This article was reported and written by Leah Hoffmann of Forbes.