What is Accumulated Savings?
In real life, when there is positive net cash flow at the end of the year, it is reinvested. The Accumulated Savings account in Family Law Software represents that reinvestment account. In real life, those funds are typically invest in a portfolio. In the software, that happens as well. The Accumulated Savings account is invested […]
How can I stop interest and dividends from accruing on accumulated savings?
Here’s how to set the rate of return on Accumulated Savings to zero.
Can I specify a fixed-dollar reinvestment in specific investments?
You can not specify a fixed-dollar reinvestment in specific investments. Here is why: The software is concerned with overall cash flows. Any positive net cash flow in a given year will be put into the Accumulated Savings account. The Accumulated Savings account is invested in a hypothetical diversified portfolio. You can see and change the […]
How can I enter the future grants of stock options?
Suppose a party is going to receive $5,000 per year in stock options for the next five years. Assuming that they will take place after the separation, the grants will not be subject to coverture and will be separate property. There is no need to enter them in the stock options worksheet. (The stock options […]
I want to show investments appreciating, but not show any current income.
On the “more info” screen for the asset, make an entry in the column labeled “% Apprec’n” and leave blank the columns relating to rate of return. Appreciation is not taxed currently but appears on the Net Worth Spreadsheet reports showing an increase in the value of the asset. In order for income or appreciation […]
How should I deal with the exercise of stock options?
Consider the following example: An employee has an option on a stock. In the year one, he exercises the option and buys the stock. Two years later, he sells the stock. The exercise price of the option is $60. The value of the stock on the date the option is exercised is $100. The employee […]
What value should I give to unvested stock options?
Different states have different approaches to valuing stock options. Some states assign no value. Other states assign full face value. Still other states are somewhere in between. We suggest that you pick or negotiate some value in between. Then enter it as an Investment that pays no interest or dividends (but that may have a […]
How should I handle Health Savings Account (HSA) and Flexible Spending Account (FSA) balances?
Our approach to Health Savings Account and Flexible Spending Accounts is as follows: 1. When the contribution is made, we treat it as a deduction. Enter it in the appropriate living expense category (health insurance or child care, usually), and choose a tax category of “FSA, Flex, Caf Etc.” 2. When the actual expenditure out […]
Why am I not seeing any current income on the investments? Or, why am I not seeing appreciation?
To enter income on an asset, go to the “more info” screen for that asset, and enter income in its appropriate tax category. Enter annual appreciation in the field for appreciation. Current income will be taxed currently, based on the tax category you specify. If you enter net cash flow instead of a Rate (%), […]
How does the software show compounding of reinvested income?
The way the software shows compounding of reinvested income is as follows: At the end of the year, any positive after-tax cash (the last column on the Net After-Tax Cash Flow Spreadsheet) is moved into an account called the “Accumulated Savings” account. Our goal with this Accumulated Savings account is to mimic the performance of […]