Outcomes achieved after separation and divorce are often measured by their ‘cost’ – after those costs have been paid, can the outcome be considered a success?


The cost which immediately comes to mind when assessing a settlement outcome is legal fees – the professional fees you pay to your lawyers, and the experts used in your case (accountants, valuers).  This is a direct cost, and without doubt an important cost to manage, as trials in the family courts regularly cost each litigant many thousands of dollars.


But there are, in fact, other ‘hidden’ costs, of which litigants are often unaware, including:-


Time coststhe time it takes for your case to be heard, and for the Court’s decision to be published, during which you will live in a form of suspended animation.  In the Family Courts, this cost can be measured in years;

Emotional costs – the energy you will expend every day in coping with what can feel like a ‘war’, and in having to go about daily life with an enormous unresolved situation being carried on your shoulders;

Lost opportunity costs – the ‘holding pattern’ in which you will live while ever your case is unresolved, unable to move ahead with new relationships, interesting investment opportunities and enticing business deals.  In other words, it is the cost, in the form of missed chances, of being held hostage in an unresolved financial case.


These indirect costs are very regularly overlooked or treated as irrelevant.  While they cannot be counted in dollar terms (like legal costs), they are of central importance, and the success or otherwise of outcomes cannot be accurately measured unless these costs have also been taken into account.


To illustrate, if you have achieved an outcome with which, from a financial perspective, you are satisfied, but you have been left emotionally threadbare as a result of the litigation process, that has likely affected the ‘bottom line’ in your particular case outcome, as the ongoing impact on your mental health will have been a bigger cost than your legal fees.


Whether you are about to embark on the resolution of your family law matter, or you are in the midst of an unresolved family law dispute, it is important to pause and reflect on each of these costs.  Make sure that you:-


  1. Talk to your lawyer about your direct and indirect costs – in addition to getting estimates of legal costs (overall, and for particular steps), make sure that you get time estimates. This will allow you to, in turn, project the emotional costs, and the lost opportunity cost, for you;


  1. Track your costs – If you don’t balance your cheque book, you don’t know how must you can spend. It is the same with your divorce – if you are not tracking all of your costs, you don’t know where you stand.  What have you spent in legal costs so far?  What future legal costs lie ahead?  How long has it taken to reach the current point?  Where does that sit in the timeline you have allowed?  If your costs are suddenly disproportionate to your target result, you can make changes in your approach;


  1. Take your costs into account in your decision making – If to achieve your target outcome will cost $50,000 in legal costs, and take 6 months, are you better to avoid those costs by proposing a partial compromise today? Though your outcome may have reduced in value, if it is achieved in months rather than years, and if you are able to have the conflict out of your life sooner rather than later, is that ‘worth’ more to you?  This is where the lost opportunity cost can have real impact – if you had your property settlement today (as opposed to having to wait 18 months for it), what would you be able to do with it – re-house in a buyer’s market, grow your business, invest when market conditions are perfect?   So ask yourself: is a lesser financial outcome in fact ‘worth’ more to you after direct and indirect costs are taken into account?


  1. Keep an eye on your adversary’s costs – Chances are your former partner or spouse is not aware of the hidden costs referred to above. If you can enlighten them about the costs they are incurring, but which they might not have thought about, you can sometimes get traction in negotiations, and reach a settlement.  That is because, whether they would admit it or not, they will probably be worried about the same costs as you.


Having been identified, the hidden costs of divorce, like legal costs, must be watched carefully – if they are allowed to get out of hand, your divorce can end up having ‘cost’ you much more than you expected.

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