8 Hidden Costs of Divorce You Can’t Afford To Ignore

As of 2024, the average cost of divorce was $7,000, with some divorce-related expenses running as high as $20,000 or more.

While most people might think of the more common expenses when they consider those numbers — like court fees, legal fees, and alimony — there are several lesser-known costs that can quickly add up.

Knowing some of the hidden costs of divorce and how much they can cost may help prepare you financially when the time comes to start the process.

Divvying up assets like real estate can get complicated and expensive. Depending on how you and your spouse decide to handle things, you may be faced with buying your ex out of the property, which can require a large sum of cash.

Or, if you need to sell the property to liquidate your assets and move on, you could be looking at paying a real estate agent between 2.5 and 3% of the sales price, or owing other real estate professionals a hefty sum of money to get things ready for the sale.

Depending on the rules and regulations in the state where you and your spouse reside, you may need to have the title or deed to your property changed so that you can stay in the property.

Some regions have hefty fees associated with this task, like New York City where the cost can range from 1% to 1.425%. For example, a person in a $400,000 home could be looking at paying $5,700 in title transfer fees alone.

Moving can be expensive. You might need to pay professional movers, rent a truck or storage unit, purchase extra gasoline, buy packing supplies, or any combination of these things. 

In 2024 the average cost to hire movers for a three-bedroom house was between $720 and $1,440.

And the cost of moving doesn't stop once you pack up that last box, either. You may also be faced with purchasing some basics to get started in this new chapter of your life, like brooms, paper towels, and even bigger ticket items like new appliances.

There are all kinds of rules when it comes to filing your income taxes, which can change depending on whether you're filing your taxes as someone who is separated but not legally separated, legally separated but not divorced, and so on.

Some people may feel more comfortable hiring a tax pro for extra help during the first two years following their divorce to ensure they file their taxes according to their marriage's new legal status.

Some folks may want to hire a financial advisor to help with this part since dividing different assets can be tricky, and some may have associated fees.

For example, transferring assets from one workplace retirement account to another might require special documentation, which can cost $1,000 or more.

In complicated divorce cases or when parties can't reach an amicable agreement, one or both parties may decide to hire experts to testify. 

An example of this can be during a custody battle when a parent hires a child psychologist to advise the court on the best interests of the children.

Vocational experts can also be called in when parties can't agree to child support or spousal support amounts. Even financial experts are sometimes paid for expert testimony in divorce proceedings.

If you were on your spouse's insurance plan, you'll need to enroll in your own plan at some point after your divorce. 

Although some ex-spouses are eligible for COBRA coverage for up to 16 months after divorce, it's typically more expensive than paying for healthcare premiums through an employee-sponsored family health insurance plan.

The IRS requires specific criteria to be met before taxpayers are eligible for certain tax credits. Getting a divorce and changes in child custody can all impact the types and amount of credits you're entitled to.

For example, if your children live with your spouse after divorce, you might need to pay child support, and you'll likely lose out on the child tax credit, which can be worth up to $2,000 per child. Reduced tax credits could lead to an increased tax liability or reduced refund amount.

Divorce is often an emotionally challenging process, but it can also be financially draining. Not everyone will incur all of the costs in this list, but knowing what potential expenses exist can help you better prepare and make divorce proceedings a little less stressful.

Working with a good divorce lawyer isn't free, but they might help you keep more cash in your wallet by fighting for more favorable terms in your divorce decree.