In 2004, Parade Magazine reported that a typical American divorce costs $20,000-$50,000 in attorney fees! You can be sure that the cost is much higher today! Another, more recent article, reported that the average cost of a litigated divorce in California averages $45,000 for each party. Most of these costs are attorney fees, and in litigated divorces, attorney costs rise rapidly, and continue for a long time.
Ben and Clare were married for 18 years. Their daughter, a high school student, was 17 years old. Ben was a contractor who had made quite a good living until two years ago when the economy tanked. Before that Clare had occasional part time jobs and she volunteered for several charities. The glue that held this marriage together was Ben’s ability to support the family. When that started unraveling, so did the marriage.
Albert and Diane were married for 19 years before they decided to get divorced.
Soon after they married, they bought a one-bedroom condominium in a neighborhood that, at the time, was not very desirable. A few years later, the 2 bedroom apartment next door was up for sale and they bought it. They combined the two apartments into a 3 bedroom unit. Over the years, the neighborhood improved a lot and they had two children.
When they decided to divorce they came to me for mediation.
Their main issue was the apartment which was worth a lot more than what they paid for it. They agreed to divide it to the original 2 separate apartments, but they couldn’t agree on who would get the larger 2 bedroom which faced the street, and who would get the smaller 1 bedroom apartment which faced a brick wall. The children were preteens and old enough to have strong opinions: They both wanted to keep their own rooms!
Virtually all property that has been accumulated during the marriage (“marital property”) is subject to be divided between the divorcing husband and wife. Almost everything of value is considered property, including retirement plans and accounts.
There are two basic types of retirement plans. Those that are defined by the benefits paid, and those that are defined by the contributions made. Retirement plans that are defined by the benefits paid are are referred to as “Defined Benefits” plans. Defined benefits plans are what most people think of as pensions. Those plans tell you how much you will receive, usually on a monthly basis, when you retire. The amount is usually based on your earnings and the amount of time spent in the pension system. Many public employees have this type of retirement plan.