Typically, ending a marriage is an emotionally overwhelming time. The lengthy and costly legal process makes the emotional rollercoaster all the more turbulent. And fees can easily escalate — separating you from tens of thousands of dollars or more. According to Canadian Lawyer’s 2011 legal fees survey, the cost of a contested divorce (where both parties can’t agree) can run anywhere from $7,208 to $74,122, with the average sum nationwide coming to $12,875.
But it doesn’t have to be this way. Michael Shuster is a Toronto-based realtor and certified negotiator who has helped countless former couples sell their marital home without losing their sanity and cash. “Not only have I worked on hundreds of unique cases with people going through divorce, I also went through a divorce myself, so I can see it from both sides,” he says. Here, Shuster shares the advice he gives his clients to help them minimize financial losses, time and upset when property is involved.
Understand the law — and know the court always gets the last word.
If you can’t come to an agreement on your own, the court will always step in to make the decision for you.
“If I can give one piece of advice, it’s to keep the emotion out of it,” says Shuster. “You can be sad, you can be lonely, you can be frustrated — that’s why we have therapists. Just stay focused on the end result. Because in the end, the Family Law Act is going to dictate who gets what anyways. The only difference is whether or not you spend $1,000 or $100,000 on lawyer fees.”
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We detailed what happens to the house in a divorce, but here’s a brief overview of the legal process: Across Canada, each province and territory has slightly different laws for handling the division of property. But here’s the gist: Marriage is considered an equal partnership and the marital home (the property you live in at the time of separation), will be divided 50/50. It makes no difference if you owned the property before you met your spouse. In addition, if you can’t come to an agreement on who will stay in the house, the court will likely order that it be sold.
To put it simply, the more you argue, the more money your lawyer makes. While there are always exceptions to the rule and battles worth fighting with an attorney, costs will be mitigated when you’re willing to negotiate and accept the law.
Negotiate with your ex before you meet with a lawyer.
The best way to minimize costs is to do your negotiations before stepping into a lawyer’s office. As soon as you start billing an attorney to helm the negotiation process, it gets costly. If both you and your ex are on the same page, you can reduce some of the delays and legal fees by having an amicable divorce. In this arrangement, you draft an agreement together outlining the grounds and terms (for example, the division of property), complete the necessary documents, and then a judge signs off on them — eliminating the need to battle in court. In Canada, an amicable or uncontested divorce costs, on average, $1,845. On the other hand, contested divorces can easily rack up tens of thousands of dollars.
“It’s the emotion that fuels the law industry and keeps people fighting back and forth for a year,” says Shuster. “They don’t see it until they’re worn out in the end and say, ‘Enough is enough, already.’”
To help with the negotiation process, Shuster recommends speaking with a mediator first who can sit down with both parties and represent both sides. “They can sit two people down and say, ‘Let’s keep emotion out of this, let’s not worry about why the marriage failed or why you’re going your separate ways. Let’s just focus on the end goal.’”
At the end of the day, it’s the length of the negotiation that costs money and harms your mental and physical health. “When you hire a mediator, you are bringing someone in who isn’t picking sides, is unbiased, understands the process, and can help you divvy up the assets, visitation, co-parenting or whatever is involved,” says Shuster.
On top of helping to keep the peace, mediators are more affordable. The choice is up to you: “Let’s not waste $50,000 on a lawyer, let’s pay a mediator $2,000. We’ll have a few meetings and then we’ll draft up a settlement. It never goes to court, it just gets mediated,” says Shuster.
Separate logic from emotions.
Shuster has seen emotion cloud negotiations time and time again.
“When you’re going through a divorce, there’s a lot of analysis, a lot of facts — whether it’s financial advice, legal advice, therapy, all that kind of stuff. But here’s the biggest shock that I can speak to as a certified negotiator: We all make our decisions based on emotion. We analyze based on facts, but we make our decisions based on emotions,” says Shuster. In his practice, the challenge is helping people who are on an emotional roller coaster. “Because no matter how much you justify what they need, what they should do — depending on where they’re at emotionally — they might not be ready to hear it or interpret it. Because their heart is overpowering their brain.”
Divorce can be one of the most difficult and painful experiences a person can go through. When you add emotion to an already confusing and complicated legal process, a fight or flight instinct kicks in.
“The minute one person says, ‘I want this,’ — it could be money, custody, the couch in the living room, whatever it is — the other person says, ‘Well, I want this.” Emotion takes over. It becomes a matter of not letting the other person get the best of you.”
It’s human nature to not want to get ripped off, but Shuster stresses the art of negotiation and focusing on the end goal to help his clients make it through. “A lot of people think the art of negotiating is all about winning. When I facilitate a negotiation, whether it’s a real estate deal or helping people through divorce, I tell them, ‘Negotiating is, first of all, not the art of winning. It’s the art of creating a win-win solution where both sides are happy with the outcome.’”
Invest in a team of professionals to guide you through the process.
When your finances are already taking a hit due to the division of assets, hiring a team of professionals to counsel you can be a tough pill to swallow. But by carefully selecting a team, they can provide guidance that will not only save your sanity, but also your money.
If you go the mediator route, you will also require a lawyer to sign off on the settlement. In addition to taking care of the legalities, Shuster suggests finding a therapist or psychologist to help you manage your emotions and focus on the end goal. “People might think, ‘Wow, $180 an hour is a lot,’ but if a therapist gets you focused and in a better place mentally in three, five, ten sessions — it’s a lot better than $50,000 extra in legal fees because you wanted to fight, fight, fight,” he says.
Shuster also recommends speaking to a financial planner who can help you make a plan for the future and protect any assets you may come out of the divorce with.
Lastly, having a realtor with experience in negotiating and selling the matrimonial home could be your secret weapon. Selling a house due to divorce brings up challenges that only a divorce specialist is trained in. For example, in difficult battles, Shuster has witnessed one spouse sabotaging the sale. “If you aren’t trained in what I’m trained in, the house can sit on the market for six, eight, ten months longer than it should because the spouse is sabotaging the sale, ruining every showing, and they aren’t accepting offers or consenting to the sale,” says Shuster. Depending on the value of the house, this could cost you a million dollar deal. In this case, a realtor with expertise in divorce can take the steps to get an emergency motion to dispense the need of spousal consent and force the sale through.
When you’re selling the matrimonial home, trust is essential. “You have to trust that you’re safe with them, that the information you share with them is protected and safe, that they have integrity and will respect your privacy and that they’re not going to do a deal under the table with your ex or somebody else,” says Shuster.