Understanding the costs of partnership dissolution proceedings allows for realistic planning and informed decisions about whether to pursue dissolution or explore alternatives. Costs vary significantly depending on complexity, whether the case proceeds to court, and the attorneys involved.
The Main Cost Categories
Dissolution proceedings involve several categories of costs: attorney fees (typically the largest component), court filing fees, appraiser and expert fees, tax payments triggered by the dissolution, real estate agent commissions if a sale occurs, and miscellaneous administrative costs.
Attorney Fee Structures
Dissolution attorneys typically charge either by the hour or a fixed fee for defined scope of work, sometimes with a success component. Complex contested cases that go to court typically cost more than cases resolved through negotiation.
Getting clear upfront information about how fees will be calculated and what the likely range is allows for proper financial planning.
Court Fees
Israeli court fees in property dissolution cases are calculated as a percentage of the property’s value. For a property worth several million shekels, court fees can be substantial. An attorney will provide specific information about applicable court fees for your case.
Appraiser and Expert Costs
Independent appraisers are typically needed in dissolution cases to establish property value. Fees vary by property type and appraiser. In contested cases, each party may retain their own appraiser, doubling this cost category.
Tax Costs
Perhaps the most significant non-attorney cost is tax. Capital gains tax, betterment levy, purchase tax (when one partner buys the other out), and other levies can represent a substantial portion of the transaction. Tax planning to minimize these costs is integral to the dissolution strategy.
The Cost of Not Proceeding
Against these costs, the cost of not proceeding must be weighed. A property in litigation limbo may be poorly managed, declining in value, or unable to be used or sold. In many cases, the costs of dissolution are less than the ongoing costs of an unresolved partnership dispute.
