“Only I didn't say ‘fudge.’ I said the word. The big one, the queen mother of dirty words, the ‘F, dash, dash, dash’ word.”

In divorce, and particularly mediation, that word is “F-A-I-R.”

January 6 is also known as Divorce Day, which occurs on the first working Monday of each new year. The timing of this somber day makes total sense, since many couples and families have been just hanging by a thread through the holidays, trying to keep it together for the kids or last until the new year so future enjoyment of the season is not also mixed with the anniversary of divorce. The financial pressures of the gift giving season can weigh on a family, and one or both parents may have made it a competition to try to buy the kids’ favor.

Divorce is a challenging and emotionally taxing process, and by its nature, the trust between spouses is strained, especially when it comes to untangling shared finances. A financial neutral plays a crucial role in providing education, clarity and objectivity amidst the turmoil. Let’s delve into the significant ways a financial neutral assist in navigating the financial aspects of divorce.

From my experience, all the planning, preparation, and progress made in a divorce can be emphatically stalled or derailed by two words...

If you are working as a Certified Divorce Financial Analyst® professional, you’ve probably networked with Family Law Attorneys, Marriage and Family Therapists, Estate Planning Attorneys, Mediators, and even Certified Public Accountants. But you might be missing a big opportunity to acquire new clients if you are not having conversations with wealth management firms.

When a couple is working through divorce, whether it is Collaborative, litigated, mediated or DIY, one of the first (and most daunting) tasks required is for each spouse to complete forms which lists any and all assets and debts they have their name on (whether it is a jointly held asset or in their individual name, be it a business interest, pension, investment account, credit card, student loan, etc.), income (from all sources, including paychecks, rental income, or dividends and interest) and living expenses.

Zonder Family Law Group recently sat down with John Duffy, CDFA®, of Zen Divorce Solutions to discuss the current economic uncertainty and how to best protect your assets – especially if you are going through (or about to go through) a divorce.

Before a reasonable property settlement can be negotiated, it's important for both spouses in a divorce to disclose all assets, liabilities, sources of income, and expenses. By arranging this information in standard financial statements and by analyzing these statements, a Certified Divorce Financial Analyst® can help you…

When marital separation occurs and a divorce is contemplated, spouses must decide how to divide their property. Property includes such assets as the family home, rental property, automobiles, pensions, bank accounts, and stocks and bonds. It also includes art and antique collections, furniture, IRAs, life insurance cash values, and family businesses.

Every parent is obligated to financially support his or her children, providing such necessities as food, clothing, shelter, etc. Divorce doesn't cause this obligation to cease. When a divorce occurs, the noncustodial parent is usually ordered to pay some child support to the custodial parent; the rest of the child's expenses are paid by the custodial parent.

Wills for both spouses are often drawn up sometime during the marriage--particularly if there are children involved. When divorce is contemplated, the selection of beneficiaries and executors will likely be revised to reflect the absence of your former spouse. Additionally, you will need to re-examine the gift and estate tax aspects of your estate plan. For these reasons, many divorcing couples revise their estate planning documents during the period of separation or soon after the divorce has been finalized.

When a couple divorces, assets (including the marital residence) are divided in accordance with state laws. Property division rules can vary considerably from state to state, so check your state's laws (or check with an attorney) to see which rules your state enforces.

If you're separated, considering a divorce, or are already divorced, you should be aware of the income tax ramifications of your divorce-related financial decisions. An important consideration should be the filing status you select for your federal income tax return. Your filing status is important because it determines (in part) the deductions and credits available to you, the amount of standard deduction that you may be entitled to, and your correct amount of tax.

If you're separated or divorced, it's important for you to become familiar with certain tax issues. Familiarity with the tax consequences of your financial and personal decisions might cause you to alter your plans in some areas. You should be aware of the tax impact of your filing status, and you should know how a married couple's income and expenses may be divided for tax purposes. You should also be aware of the tax treatment of pensions, alimony, and child support, and you should know the significance of claiming a child as a dependent.

Like property, debt is classified as marital or separate. In general, both spouses are responsible for any debts incurred during the marriage. It doesn't matter which party actually spent the money. When the property is divided at the time of divorce, it's often the case that the person who gets the asset also gets the responsibility for paying any indebtedness secured by that asset. Even if your spouse agrees to take over the debt, joint obligors on a loan will remain jointly responsible. That is, the creditors can seek payment from either of you.

A retirement plan is a form of property. Like houses, cars, and bank accounts, a retirement plan can be divided between spouses at the time of a divorce. For example, if one spouse participates in a pension plan at work while the other spouse remains at home to care for the children, a judge has numerous options with respect to the retirement plan. Among other choices, he or she can award all of the pension to the working spouse, award all of it to the nonworking spouse, or split it equally (50/50). Judges often use QDROs to effect these pension assignments. In a marriage of long duration, a pension plan may be one of the most valuable marital assets.

Divorce can be a lengthy process that may strain your finances and leave you feeling out of control. But with the right preparation, you can protect your interests, take charge of your future, and save yourself time and money. You certainly never expected divorce when you cut the wedding cake; you and your spouse planned on spending the rest of your lives together. Unfortunately, the fairy tale didn't work out, and you're headed for a divorce. So where do you begin?

While divorce is certainly a time of emotional turmoil, it's a time of financial upheaval as well. The financial change brought about by divorce can be particularly devastating to families with children and to older couples who have assigned the career duties to one spouse and the homemaking duties to the other.

When seeking a divorce, you should become familiar with the major topics: legal fees, marital property versus separate property, alimony, debt, retirement plans, property settlement, taxation, budgeting, and, if you have children, child custody and child support. You should also consider risk management, and, if you're older, Social Security.

There's no doubt about it — going through a divorce can be an emotionally trying time. Ironing out a divorce settlement, attending various court hearings, and dealing with competing attorneys can all weigh heavily on the parties involved.

In addition to the emotional impact a divorce can have, it's important to be aware of how your financial position will be impacted. Now, more than ever, you need to make sure that your finances are on the right track. You will then be able to put the past behind you and set in place the building blocks that can be the foundation for your new financial future.