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Both spouses are entitled to marital assets to hire lawyers

Complex assets or protracted litigation can make hiring a divorce lawyer rather expensive. This is especially problematic when one spouse has less money or no access to the marital accounts and the other has the means to hire top-flight legal counsel.

New Jersey law addresses this unfair scenario. One spouse can request that the other spouse pay some or all of their divorce-related attorney fees. The courts consider the need, the financial wherewithal and the conduct of both parties.

A New York court awarded spouse $4 million for legal fees

In a recent high-profile case in New York City, a court awarded $4.1 million to the wife of a hedge fund owner who petitioned the court. That’s not her divorce settlement – that’s just for her share of the legal fees to litigate the divorce! It sounds like an extraordinary sum, but it is a tooth-and-nail divorce and custody battle involving a $200 million marital estate. The expected litigation could eat up the $4 million and then some.

While four million dollars is jaw-dropping, it is not uncommon in high-asset divorces for courts in New Jersey to award legal fees of $100,000 or more to one spouse to put the parties on more equal footing. Without the financial means to “fight fire with fire,” the disadvantaged spouse would get buried in legal paperwork and bulldozed in court.

What are the criteria to get an award of legal fees?

New Jersey law calls for an equitable distribution of the marital estate. But when one spouse earns substantially more income or controls the finances, the other spouse may not have the means to pay a lawyer’s divorce retainer.

Under New Jersey statute (Rule 5:3-5), family court judges can compel the higher-earning spouse to subsidize all or part of the other spouse’s legal representation. The court can also order one spouse to cover anticipated services in a divorce, such as real estate appraisers, business valuation experts, forensic accountants, custody evaluators, and QDRO experts to divide retirement assets.

The court can consider:

  • The income disparity between the parties
  • The ability of the petitioner to pay his or her own costs
  • The ability of the other party to finance the spouse’s legal fees
  • Whether the requested fees and expenses are justified
  • Bad faith actions (by either spouse)

How does 'bad faith' factor in?

Divorce proceedings can be nasty, on both sides. But the courts take a dim view of monied spouses who take advantage of the financial imbalance or purposely drag out the proceedings. For example, it might be viewed as bad faith if the higher-earning spouse uses delay tactics such as filing superfluous motions or failing to respond to discovery. Other examples of bad faith include hiding money, transferring assets, withholding child support or interim spousal support, or flatly refusing settlement overtures.

If the high earner is intentionally engaging in such conduct, a judge is more likely to order him or her to fund all of the spouse’s legal expenses. At the end of divorce proceedings, the court can order additional allocation of money to the disadvantaged spouse to reflect a “final accounting” of legal fees and other costs.

Will you need financial help to fund a divorce?

Lack of funds should not force anyone to stay in an unhappy marriage or be railroaded into an unfair divorce settlement. You may not have the money in your bank account, but remember that (approximately) half of the estate is yours. A judge can force your spouse to pay some or all of your divorce fees, or even order that marital assets be liquidated to fund your legal representation.

 

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