What is the average cost of divorce in Victoria?
12 November 2024
When a married couple decides to separate, there can be quite a journey ahead when it comes to filing a divorce application and finalising the separation of assets. Significant costs may be involved. In this article, we’ll look at the average cost of divorce and what factors contribute to costs rising. We’ll also look at models that enable divorce costs to be kept at a minimum.
Divorce costs - the complete journey
If it were only the cost of the divorce application at play, then divorces would not be unbearably expensive, however the costs of settling a divorce in its entirety are difficult to predict. Negotiating parenting arrangements (if applicable), the settlement of property, and spousal maintenance usually requires the services of mediators and/or lawyers, and this comes at a significant cost. Additionally, if there is disagreement as to arrangements, and a lot of back and forth between parties, costs rise. If matters proceed to court, they rise more.
Average Cost of Divorce in Australia: Breakdown
The cost of a divorce in Australia depends on factors like legal representation, property settlement, and parenting arrangements. Here's a breakdown of the average costs:
- Divorce Application:
Filing Fee: $1,100 (or $365 for financial hardship).
Legal fees: $2,000 to $4,000 for uncontested cases.
- Property Settlement and Parenting Arrangements:
Litigation: If disputes go to court, expect costs between $10,000 to $100,000+. This is what we try and make sure we avoid.
Alternative Dispute Resolution (e.g., Mediation): Mediation typically costs between $10,000 - $15,000 per person and is faster and cheaper than court. These fees include the costs in preparing a matter for mediation including the mediators fees.
Lawyer’s fees: Solicitors typically charge between $350 to $600 per hour, while barristers can charge $1,500 to $7,000 per day.
Note that mediation and legal fees vary between different providers so always ask for information on pricing for any firm you are considering.
Divorce - The average costs
Application for divorce
The Family Court of Australia charges a $1,100 Application for divorce filing fee, and a reduced fee of $365 for eligible parties in financial hardship.
Joint divorce application
Filing for divorce together is the best option for amicable separations. In this case, you submit a divorce application together, and usually don’t need to attend a divorce hearing, unless you share one or more children under 18 years of age.
Sole divorce applications
If you are filing for a divorce as a sole applicant, the application for divorce will need to be served to your former partner. This comes at a cost, as a third party will need to be employed to serve those papers. Postage fees also apply.
If you are served with the application for divorce, you don’t need to pay the fees, however you will pay a fee if you oppose the application and wish to change it.
Mediation costs
Prices for mediation in Victoria vary, however you can expect to pay something between $2,000-$6,000 per day. Full day sessions are often available for a fixed price.
Whilst a mediator is not always employed as part of a divorce settlement, they’re often recommended, particularly when partners are in dispute about property settlements and/or parenting arrangements. In cases involving children, it’s usually a requirement under law to use mediation prior to proceeding to court.
Mediators are able to help divorcing parties:
Help facilitate clear and constructive communication between parties, with an aim of progressing to decisions where both parties’ wishes have been heard and understood.
Resolve disagreements: Financial settlements, the division of property and parenting arrangements can be complex, and it can be difficult for both parties to agree. A mediator can help to calm things down during conflict, and keep to the path. They can also help to ensure agreement is resolved during mediation, rather than afterwards, as adjustments to agreements can add to costs.
To create mutual agreements: Mediators are impartial, and are there to support both parties. They therefore ensure that both parties have their voice heard, and contribute to final decisions. This aids in producing more amicable arrangements that are less likely to be discarded at a later date.
To avoid court: Mediation is a more cost-effective and faster alternative to litigation, allowing couples to settle disputes without going to court.
Legal costs
Hiring family lawyers for negotiations can cost between $350 to $750 per hour, plus GST, while litigation can escalate costs to $50,000 or more per person.
Property Settlements
The cost of property settlement varies depending on whether or not both parties are co-operative. For cases where both parties are in agreement on property settlement matters, costs sit around the $5,000 mark. If there is disagreement, costs can escalate to in excess of $100,000. Typically, the range is between $5,000 and $20,000.
Property settlements after separation involve dividing assets between former partners, often requiring legal advice to ensure a fair outcome. Several approaches can be used, including mediation, collaborative law, direct negotiation, or litigation through the courts. Each method aims to help parties reach a mutually beneficial agreement, with legal advice tailored to the specific needs of the individuals and their family.
In cases that proceed to court, the Family Court follows a four-step process. First, all assets, including superannuation, are identified and valued. Next, the court evaluates the contributions of each party, both financial and non-financial, such as homemaking or parenting. The court then considers future needs, including financial positions and caregiving responsibilities. Finally, the court ensures that the division of assets is just and equitable. If parties cannot agree through negotiation or mediation, legal support may be needed for litigation.
For married couples, property settlements should be completed within 12 months of a divorce application being finalised. (De-facto couples have 24 months to settle property after separation.)
For more information on property settlements, Family Law Property Settlements
What contributes to a more costly divorce
Divorce costs in Australia can rise due to several factors:
High Conflict: Disagreements over property division, parenting arrangements, or financial settlements lead to increased legal involvement, prolonged negotiations, and potentially expensive court litigation.
Legal Fees: Hiring family lawyers or barristers for negotiations or court proceedings can significantly drive up costs, especially with billable hourly rates between $500 and $750, or even higher in complex cases.
Complex Financial Situations: Cases involving extensive assets, businesses, trusts, or superannuation can require costly financial evaluations, including accountant fees and property valuations.
Litigation: Going to court is typically the most expensive route, particularly if negotiations fail and the court must make final decisions.
Time and Delays: The longer the process takes, whether due to delayed negotiations or scheduling issues in court, the higher the costs become, as additional legal and professional fees accumulate.
Preventing a costly divorce
The more amicable your divorce, the less it is likely to cost. Unfortunately, conflict can’t always be avoided, but if you both agree to the decision of a divorce, and decide to keep discussions out of a legal setting as much as possible, then a divorce will likely be cheaper.
With an amicable divorce, there is usually:
Less spent on legal fees
With minimal involvement by lawyers, legal fees can be greatly reduced. In an amicable divorce, when both parties agree on major issues surrounding financial settlement, property division and parenting plans, the need for multiple legal consultations and for court appearances is reduced. Given lawyers can charge between $350 and $750 per hour, then avoiding these fees is useful financially.
In an amicable divorce where legal assistance is required, both parties may agree to use a fixed-fee legal service, which are available generally only for uncontested divorces. This avoids hourly billing, and parties know upfront what they’re likely to pay in total fees.
Another alternative is that some divorce applications are completed online, and/or some couples choose to self-present in court, which is again, lower in cost.
Likelihood to choose mediation over court
When couples are speaking to each other, but still have issues to iron out, mediation can be a much cheaper option than heading to court. Mediation costs between $10,000 and $15,000 (it depends how many sessions you attend). Total costs of court proceedings, on the other hand, can sit between $13,000 and $40,000 or more per party, therefore from a cost perspective, mediation is preferable.
Family Dispute Resolution (FDR) is another service that keeps costs down. Similar to mediation, FDR is available through government-supported providers for either a low cost or for free. FDR is mandatory before family law cases are permitted to proceed to court, so if disagreements can be settled at this point, it is more cost-effective than court.
Opting for consent orders and doing it yourself
When both parties agree on parenting and property arrangements, a consent order can be used. Consent orders incur a much smaller cost ($200) than going to trial, which involves legal and court filing fees. In addition, it can take a long time to get to court, so costs can add up in the meantime.
Avoiding court appearances
If you separate amicably, you can avoid attending court altogether for property settlements, whereas a contested court process can cost upwards of $25,000, depending on its complexity.
Lower Emotional and Financial Stress
A cooperative divorce means that much of the financial and emotional toll of a divorce can be avoided. Long, high-conflict divorces can impact people’s finances and wellbeing, so if both parties remain amicable throughout the process and focus on solutions rather than on disputes, then resolutions tend to be faster and cheaper for all.
Planning for the possibility of divorce
Whilst nobody wants to think the worst, divorce is very common in Australia (according to the ABS, there were 48,700 divorces in Australia in 2023). With a statistic like this, it makes sense to consider the possibility that you might not be with your spouse forever. This is why many people choose to put into place a Binding Financial Agreement, ahead of their marriage.
Binding Financial Agreements (commonly known as pre-nups) can prevent many of the legal costs surrounding a settlement. A Binding Financial Agreement (BFA) is a legal contract under the Family Law Act 1975 that allows couples to determine how their financial resources, including property and liabilities, will be divided in the event of separation or divorce. It can be set up before, during, or after a marriage or de facto relationship. For married partners, a BFA provides financial protection and clarity, ensuring personal assets are safeguarded and inheritance for children from previous marriages is preserved. It can also help avoid costly legal battles by providing a clear financial roadmap in case the relationship ends.
For a BFA to be legally valid:
Both partners must receive independent legal advice from separate lawyers, to ensure they each understand the implications of the agreement, how the agreement may impact their rights, and if they might be advantaged or disadvantaged by the agreement.
Each party must fully disclose their financial circumstances, income, assets and liabilities. (If they don’t, the agreement could be set aside by a court at the time of a divorce.)
The BFA must be signed by both parties in front of a witness (oral agreements aren’t legally binding).
Neither party should sign a BFA under duress, and if the agreement was signed based on fraudulent information, it may be legally invalid.
BFAs cannot include child custody or parenting arrangements, as these matters are under the court's jurisdiction.
At the time of divorce, a BFA generally stands, but it can be challenged or overturned by the court if there is evidence of unfairness, omitted financial information, or if one party was coerced into signing. Significant life changes, like the birth of a child or a partner's illness, can also affect its enforceability.
See Binding Financial Agreements for more information.
For more information on our Divorce and Separation services, book a consultation with Aitken Partners today.