There has been much talk lately about a potential national “fiscal cliff” — i.e. changes in various statuses that can have a significant economic impact. A different kind of fiscal cliff can also exist for folks upon the finalization of their divorce. Economically, the parties have either reached a financial agreement or a Court has made a determination about how financial assets and liabilities will be divided. Knowing the potential cliff consequences while negotiating or while preparing to present evidence to a Court is important. For example, the marital residence being sold can have different impacts depending on how long it has been owned whether it has positive or negative equity, whether either party can qualify for a new mortgage or lease. Another example is the tax implications that come from being divorced and no longer being able to file jointly depending on whether spousal support is being paid or requested, depending on who is claiming the children, etc. These are just a few limited examples. Be sure when you are contemplating a separation or divorce that you are working with your attorney and any additional financial professionals to understand all components of assets and other finances pertaining to you and your family to seek as much protection as possible.