Finding the Money for Divorce When Your Spouse Controls the Money
Finding the money for legal fees for divorce is often problematic, even for people who live well and have substantial assets. Sometimes the problem is one of cash-flow. Sometimes, the other spouse tightly controls all of the assets.
But there are solutions to this problem. One way to handle the situation is to simply borrow the funds for the initial retainer, which your lawyer will likely insist on. You may do this simply by putting the retainer on your credit card. You may also choose to borrow the retainer from a relative or friend. If you do so, you should document the loan, even if a relative is involved. A simple note can be drawn up by your lawyer.
But if the case may be contentious or complex, you should talk with your lawyer about the additional fees that will be incurred beyond the retainer, and how you can go about paying those fees under your agreement with the lawyer. Here are two solutions that may be proposed:
First, when a spouse files for divorce, he or she can request temporary orders to obtain interim attorney fees. If successful, this may cover some of the attorney’s fees in the case, although it usually will not cover all of them.
Even if the judge does not order interim attorneys fees, there may be other orders that are granted that give some financial relief and therefore enable the spouse to pay at least some of the attorney’s fees. Temporary orders can also provide temporary spousal support, temporary child support, prevent the sale or transfer of community assets, and require the disclosure of the financial information of the spouses among other things. If your spouse controls all of the assets, the judge may order your spouse to pay your fees, or at least a part of them.
Second, discuss your marital assets with your lawyer early on so your lawyer can determine whether there will be enough assets awarded to you in the divorce to justify the fees the lawyer anticipates having to charge, with assets left over for you. In many cases, a lawyer who sees that payment will be forthcoming by the end of the case may be willing to wait for some of her fees, especially if a substantial retainer was paid or if interim attorney fees were obtained.
In practice, it is often a combination of the above means that solves the problem: a retainer paid with borrowed money or a credit card, a temporary hearing for interim fees, and/or collection of fees at the end of the case from property and assets of the estate. A party should realize that some of the items of property that end up going to pay attorneys fees may raise tax questions. It is not unusual for clients to need to cash in some or all of an IRA or 401K or an annuity to pay fees and taxes will have to be paid if that happens.
The important thing about fees is to discuss them with your lawyer at the initial consultation. Scraping up a lawyer’s initial retainer in the hopes that is all the payment that will be required is not a realistic approach to a complex or contentious divorce case. A client needs to talk to the attorney about how fees may be paid throughout the case, even if it goes all the way to trial.