Divorce: What will it cost and can you afford it?

If absence makes the heart grow fonder, lockdown can do the opposite. Irish solicitors report a spike in divorce enquiries as couples emerge from isolation.

If irritants like money, housework, childcare and screen time have finally gotten the better of you, and you want out, what will it cost to divorce and can you afford it?

Financial intrusion

If you want a divorce, prepare to bare your finances. Both spouses must provide an affidavit of means setting out their assets, income, debts, liabilities, pension and outgoings. That includes at least 12 months of bank statements and credit card spending and, for the self-employed, three years of accounts and tax returns.

The process is financially intrusive. Solicitors will be looking at your spending and perhaps for evidence of non-disclosure. "If I see transfers on a regular basis to another account, I'm asking what is it – a new partner, a child," says Avril Mangan of Mangan & Company Solicitors.

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Your solicitor may get a firmer grasp of your spending than you.

“I had a case where the husband, who was the provider, was saying his wife had a ‘royal lifestyle’. I went through every single transaction and it was just normal family spending. That’s how much it costs if you have a south county Dublin life with children in private schools. People can be quite unrealistic about their cost of living,” says Mangan.

If you were thinking of a 50:50 split, think again. There is no principle of division in Irish law, but rather a concept of “proper provision”. This means that assets are looked at with a view to properly providing for each spouse and any dependant members of the family.

Family home

If the house is in your name, it’s not a given that it’s yours. If your ex to-be moved into a house that you bought, he or she may still have a claim.

“If someone has never put a penny into the property, never paid a bill or contributed to the mortgage, they still have rights because it’s the family home. Even if there are no children,” says Mangan. “A court has to ensure both spouses are properly provided for.”

If the marriage is a short one between younger working people with no children in a jointly-owned home, things can be clear-cut.

"The court will be looking much more towards people taking what they brought [into the relationship] and going their way, unless that would in some way fly in the face of proper provision," says Lorna Duffy, a Ranelagh-based specialist family law solicitor. The options to be negotiated are selling the house or, if they have sufficient funds and the bank agrees, for one party to buy the other out.

Individual contributions are likely to count for more in a short, child-free marriage too, says Mangan. “In one instance where the couple had been married only a couple of years, they agreed, because my client’s parents had given her a sizable contribution towards the deposit, that it was given back to her as well as a share in the equity.”

A longer marriage with children will be different. If there is a primary carer, one option is for that person and the children to remain in the family home.

“But you can’t forget the party leaving the family home,” says Duffy. “They have to be accommodated too and probably somewhere that allows them to have the children stay with them.” In expensive areas, running two family homes will be hard.

“If it’s absolutely not feasible to provide for everybody by remaining in the family home, then a sale of the family home is possible, but not where it would leave everybody without enough money to house the children.”

The sale of the family home when children reach a certain age is also an option. “You could have a right to reside in the family home until the children cease to be dependent at 23, and then they get a greater share if it when its sold,” says Mangan. “But then the other person might get more of their pension, there is usually a trade off somewhere.”

If one partner is in rented accommodation, it may be their goal when negotiating to ultimately be in a financial position to get another mortgage. Parties should be mindful, however, that getting another mortgage when older will be tricky.

Savings and pension

If you didn’t twig it in marriage, then the notion of “your money” and “my money” won’t work in divorce either. If a savings account is in the primary earner’s name and that’s where their bonus went every year, it doesn’t mean it’s theirs.

But nor does it mean it gets distributed in any set way, says Duffy. “It will be done on the basis of the needs of the family with the children at the top of the list.”

Pension, like everything else, is looked at as part of the overall package. “The pension might be dealt with in certain proportions because the family home has been dealt with another way,” says Duffy. “Someone might take a reduced share of one asset and a greater share in another because that might suit.”

Equalisation of pension is another possibility. “If I build up a fine old pension because my husband has been at home with my children and now we are 15 years down the line, he’s not going to be told, ‘You have nothing in return, sorry’, says Duffy. “It will be looked at in terms of proper provision.”

In marriage, a spouse is usually nominated on a pension policy as a beneficiary. In divorce, a special Pension Adjustment order must be sought to bind pension trustees to doing what the divorcing couple or the court wants.

“The pension trustees will be told what to do with the death in service lump sum. For example, ‘you don’t give it to my husband, but you give it to this person I nominate’,” says Duffy. Again, in a shorter marriage, parties might agree to stick with their own respective pensions.

Maintenance

There is no set formula for child or spousal maintenance. Income and earning capacity of the spouses, and the age, number and needs of the children are all taken into account when arriving at a figure.

If someone remains in the family home, with the other person taking a lower share, that can feed into how much maintenance they pay, says Duffy.

Debt is a factor too. If you have a good salary but are paying off big debts, your ability to pay maintenance might be lower than a person on a lower salary with fewer outgoings.

If one person isn’t working and their children have reached an age, earning capacity is looked at. “If it seems to a court that someone is in a position to make money, they may ask if you can take on a morning job. Or if you are keeping the family home, could you rent a room and make some extra income for yourself there?

“It’s not enough to say, ‘I’m not working that’s the end of the story. The court may want to know, ‘Well could you?’,” says Duffy.

“A dependant spouse is a dependant spouse and, if you provided for them, then spousal maintenance will arise,” says Mangan. Getting a job may not be realistic. “If, at 55, you are doing your degree, realistically what pensionable job can you get that can provide for you into the future?”

She says in families where there is relative affluence, a dependant spouse may have less to live on. “Maybe they are used to whatever was in the joint account and they never had to think about money. That changes and it can be difficult.”

The courts would always feel everybody has to cut their cloth, says Duffy. “Standards of living invariably are affected. Parties will find the maths are such that you can’t continue with all the same outgoings.”

Maintenance arrangements are always reviewable if circumstances change, even if your divorce is finalised. However, if the party being paid maintenance remarries, spousal maintenance stops.

Inheritance

If you received an inheritance, where you keep it also matters. If the money was kept in a separate account, not intermingled with marital assets, the court may ring fence it.

“It might be €20,000 inheritance in your credit union account. The court will take it into account in making proper provision but they will try to leave the €20,000 alone,” says Mangan. If it’s in a joint account, it’s very definitely a marital asset.

“If one person’s inheritance was used to buy an apartment in joint names, that’s a joint marital asset.”

Legal costs

After buying a house, divorce, if it arises, is one of the most important financial decisions a person will make. It’s important to get it right.

If you decide to start with mediation, the State's Family Mediation Service provided by the Legal Aid Board is free, but there is a waiting list. Family law solicitors recommend getting some legal advice first.

“That way you go to mediation with information, you can sit down together knowing what your rights are,” says Avril Mangan.

Don’t expect relationship counselling, however. Mediation is not there to persuade you to stay together. It’s about helping couples to negotiate their own terms of agreement.

If you and your spouse can’t agree through mediation, it’s certainly advisable to engage a family law solicitor. There is no fixed rate of charges for legal fees, so shop around and get some quotes. If your annual disposable income is less than €18,000 and you have assets of less than €100,000 excluding your house, you may qualify for free legal aid.

Reaching agreement outside courts reduces time, cost and stress. Such agreements are more likely to be honoured too.

The problem of spiralling legal costs is often not the lawyers, it’s clients who are hurt, says Mangan. Fighting every point tooth and nail will rack up legal costs, leaving less in the pot for you.