Divorce application to property settlement: What is the cost of divorce in Australia?
Divorce is not only a legal process—it’s a life-altering journey that comes with emotional stress and financial strain for the individuals involved. This is why understanding the true cost of divorce in Australia is important for anyone considering, or currently undergoing, this life-changing journey.
Beyond legal fees and paperwork, there are numerous hidden expenses that can catch even the most prepared individuals off guard, so it’s helpful to have a clear picture of what’s involved, so that you can determine what is the best way to proceed.
In this blog post, we’ll uncover the often-overlooked financial burdens that accompany the dissolution of marriage. From making parenting arrangements, division of assets and divorce applications. There are several factors contributing to the total cost of divorce in Australia, and these factors may affect you.
What’s the cost of divorce in Australia?
The act of getting divorced itself is not necessarily expensive, however it’s worth remembering that the divorce application is separate from your divorce settlement, which involves property settlement, parenting arrangements, or maintenance application after your marriage ends. So, whilst it’s a common first step for couples to try to figure out who pays for the divorce when a marriage ends, the cost of the divorce and separation in its entirety may be difficult to predict.
For every marriage that is dissolved, the circumstances will differ. In some cases, costs will apply to both members of the couple, and in other cases, costs will vary between each party, depending on the circumstances and separation path chosen.
Several factors influence the cost of a divorce, including whether you are married or in a de facto partnership, if you have children, the level of conflict, and the complexity of your financial situation. The level of conflict dictates the approach taken in a divorce, and this chosen pathway significantly impacts the overall costs.
Let’s look at some of the costs involved in a separation and divorce.
What is the cost of a divorce application?
According to the Federal Circuit and Family Court of Australia, an application for divorce costs $1,100. Those who qualify for a reduced fee can expect to pay only $365—the minimum cost of any divorce. It is recommended that you commence seeking legal advice in relation to property settlement before you are divorced, due to the time limits imposed on property settlements.
Divorce Application - Joint or sole application
Sole application:
If you’re filing for divorce as a sole applicant, you need to consider the fees for a third-party professional to get the divorce application process started. This will include the postage fees to serve the application for divorce to your former partner.
If you’re the one being served with an application for divorce, you won’t be required to pay the fees. But if you want to oppose the divorce application, or you want to file your order in court, you will need to take on the fee to change the application.
Joint divorce applications:
Joint divorce applications mean you and your partner submit your application for divorce together. This is a quicker and more financially practical method. Neither you nor your partner will need to attend the divorce hearing—unless you share a child under 18.
What is the time limit for property settlement?
For married couples it is 12 months after the divorce application is finalised.
Once a divorce order is in effect, all matters relating to your property settlement should be settled within 12 months, just in case you need to initiate court proceedings if you don’t reach agreement during mediation. You can request a leave of court to have your matter put before the court, but this could be rejected if there is not a valid reason why the time was exceeded.
Although a divorce can be completed before your property settlement is concluded, delays in negotiating can bring you closer to the 12-month time limit, so it is preferable to negotiate property settlement prior to the actual divorce application being filed.
For de-facto couples, it is 24months after the date of separation.
What is the cost of a divorce settlement?
Divorces and legal separations often involve costs related to the division of property and assets, and establishing arrangements when there are children involved.
You don’t have to wait for the divorce to be finalised to start working out these aspects. It is ideal to start ironing these arrangements out as soon as you separate.
What, and how much, you incur in costs depends on your route. If you choose to opt for traditional legal routes, for example by going direct to a family lawyer, the cost you incur will likely be much higher than if you choose a separation and divorce service firm. Separation and divorce service firms work with couples looking to separate and divorce amicably, and help arrange matters for a fixed fee. By following this path, couples can access a more cost-effective solution, with less stress involved.
Family lawyer or professional negotiation
Appointing a lawyer to represent and negotiate your settlement becomes necessary when communication with your partner breaks down and they show no real intent to mediate. The costs for this service can vary depending on the lawyer you select, typically ranging from $500 to $750 per hour. Be aware that these are billable hours, and costs can accumulate rapidly.
Alternative Dispute Resolution
Dispute resolution can take many forms, including negotiation and mediation. The result of dispute resolution is that both parties may come to a mutual agreement regarding topics like division of property, and parenting arrangements. This makes for a faster and cheaper process than going to court, with an estimated cost of about $2,500 per person for either parenting or property mediation. This price does not include the costs to make your agreement legally binding.
Working with a Family Dispute Resolution Practitioner/mediator who facilitates your mediation empowers you to decide the outcome for your parenting arrangements and/or division of property.
Parenting Arrangements - Agreeing on parenting arrangements enables you to define decision making responsibility, time children spend with each parent, holidays, special occasions, medical, education, travel etc. At the end of mediation you will be provided with a parenting plan detailing the agreed parenting arrangements. This parenting plan is not enforceable, so you can decide to have it converted to orders to make it legally binding.
Financial Settlement - The first step is to identify your net property pool and complete financial disclosure. Your financial and non-financial contributions and future needs are captured to provide an overall view of your financial matter throughout the relationship and post separation. You will then be referred to independent family lawyers to gain advice on what you may be entitled to as your share of the property pool. Your property pool may be made up of savings, businesses, shares, property, vehicles, trust funds and superannuation. Mediation will then help you create proposals so you can both negotiate an agreement during mediation. Your agreement can then be drafted into a binding financial agreement or orders and certified by a lawyer to make your agreement binding and enforceable
Cost-effective routes to divorce and separation
Getting the help of a legal professional and taking the traditional legal route can be expensive, with family lawyers and barristers charging hefty hourly and daily rates. Additionally, you may even have to pay for other costs related to legal proceedings, like valuation costs, accountant fees for valuing your asset pool, and more.
If you choose to forego the traditional route to divorce and separation in Australia, you can select a provider that offers guidance and support on divorce and separation issues. A divorce and separation services firm, such as Simple Separation, offers couples an alternative way to get a fair and quick separation at a fraction of the standard cost of divorce in Australia.
Litigation
This is generally for couples who have tried all options to reach agreement and require the court to decide their outcome for division of assets or parenting arrangements of the children as part of the terms of their divorce. If you choose to pursue litigation, you’ll need to set aside a budget for legal support, costs of the legal process, and court costs.
The legal support you select can be anywhere between $50,000 and $100,000 each, or even more. This pathway erodes your property wealth pool, impacts your ongoing coparenting relationship and can make negotiations adversarial whilst keeping the whole family in a highly stressful environment for 1-2 years. It is important to try to negotiate together or gain support through mediation before embarking down the legal route as a last resort.
Simple Separation provides separation and divorce services for a fixed fee helping you formalise your private agreement or assist you via mediation to reach agreement and formalise those agreements to being legally binding.
Summary of Costs
So with all that said, what is the average cost of divorce application and separation? As you can see there are many complicating factors so it is difficult to give one answer, however, based on a broad rule of thumb you take the average cost of a divorce application to be around $5k with lawyers involved. The average total separation costs are closer to $20k per person (this includes parenting and property). Cost or parenting arrangements and asset division depend on the degree of conflict. The higher the volume of legal communication required, the hgher the cost. The more parties can work together or choose a pathway that is more collaborative, the lower the cost.