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Question: How can I find the present value (PV) for spousal support (the lump sum buyout amount)?
There are two ways to get the present value calculation:
(1) If you have already entered the parties' income and expenses into the software; or
(2) If you have not.
We will describe each of these approaches.
1. If you have already entered the parties' income and expenses.
Go to where you enter the spousal support amount. This loccation can be reached from a link at the bottom of the Client Info > Income & Expenses > Wage-Like Income page, as well as the bottom of the Client Info > Income & Expenses > Living Expenses page. Thee are links to a page where you can enter spousal support of the current relationship.
Right below where you enter that amount, you will see the present value. This number will update instantly as you change the amount or duration of spousal support.
This is an after-tax valuation. The software is using the marginal state and federal tax rates that it calculates, based on all of the other income and expenses that you have input. So if you are using this screen, it is important that both parties' incomes and expenses have been input.
By default, the software uses a current 20-year treasury bill rate as the "safe rate," the discount rate.
2. If you have not entered the case information into the software.
For another approach to this same calculation, click Analysis & Negotiation > More Spousal Tools > Spousal Support PV (Buyout).
On that screen, you will be able to override the software's calculation of the marginal federal and state tax rates, and also you can enter alimony amounts right there, so you can jump right in without having used any other part of the software.