First Things First
If your clients are going through a divorce, the first thing you should do is tell them not to panic. Counsel them to be efficient and thorough and aim to get it finalized as quickly as possible. Hire an attorney and explain to him or her things that could be financially devastating to the client-such as depreciation recapture taxes that accrue when a rental property is sold as a result of the divorce negotiations. How much are the ongoing payments made to the ex-spouse and what are the tax ramifications? What creditors are involved? Remind the client to remove the name of the person who no longer owns the property after the divorce. If the ex is still listed on the loan, the creditors have the right to go after him or her for those payments and the remaining balance.

Blocking Out The Competition
There is also a defensive strategy your clients can take. You can have them contact top divorce lawyers to ask them questions about the case; even if they don't end up working out, these attorneys, as long as your client reaches them first, won't be allowed to confer with the soon-to-be ex because of the potential conflicts of interest it would create.

Costs Involved
Many costs are involved in a divorce, including fixed and discretionary expenses. There are lawyer fees, specialty fees for things such as business valuation, fees for mediators, arbitrators, vocational experts and therapists.

Theoretically, these costs will continue for the entire period both spouses are slugging it out and perhaps afterwards. A good lawyer will try to expedite the process and use alternative forms of dispute resolution to limit the process. This will help save costs.

The courts and attorneys usually make the main breadwinner the responsible party for the expenses through the divorce, so your client may be called upon to pay for both parties. It boils down to who is in the best position to pay for these expenses. Sometimes the courts may force an executive order to do just this.

Have this arranged up front. A budget will provide your client with a starting point.

If one of the spouses is behaving badly, the court can grant a temporary order that limits the amount of money the spouse spends. But temporary orders are supposed to be just what they sound like ... temporary.

Litigation Budget
Have the lawyer develop a litigation budget. Many attorneys are uncomfortable with this for fear that you can take it too literally and expect the expenses to directly correspond to the amounts you set up. Even worse, the spouses may try to hold the attorneys to those amounts. That's because it is difficult, even for attorneys, to predict the course the litigation will take, especially if something unexpected happens, such as a fight over assets. So the client and attorneys should start by anticipating a range of expenses, as opposed to an exact dollar amount. This budget should have broad categories rather than many detailed categories, including items for discovery, negotiations, alternative dispute resolution, trial preparation and trial.

Analyzing Income
The clients and attorneys should list all the income earned by each party. Counsel your client to immediately open his own separate savings or checking account and have funds deposited directly into it. Even if your client is the main breadwinner, make sure the money he or she earns goes first into the new separate account before it is transferred into the joint account. As soon as the separation is permanent, this income becomes separate property.

The way joint assets are handled depends on whether the divorce papers have been filed. Before either party files, joint assets can be used in any way. Once the papers have been filed, each party owes it to the other not to do anything that would harm jointly owned interests. (Sometimes, clients facing a divorce try to reduce their asset base in a divorce negotiation by borrowing against their retirement, since 50% of a retirement account can be borrowed. But judges can see through that.) Jointly owned property must be managed for the benefit of both parties. For financial advisors, this means that taking care of joint assets is a fiduciary responsibility.