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 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 […]
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 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 […]
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 stop interest and dividends from accruing on accumulated savings?
Here’s how to set the rate of return on Accumulated Savings to zero.
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 show children’s assets (including 529 Plans) being used for college?
Suppose you have a pool of assets that you have designated as children’s assets. They may be in a 529 Plan, or not. You can enter them as either “Cash and Investment” assets, or as “IRA/401k” assets. The advantage of entering it as an IRA/401k is that you can enter annual contributions, and the software […]
A third party (such as a grandparent) has custody of the child. How can I calculate the child support that each of the two parents owes to the third party?
We are not aware of any state in which there is a formula for this. One approach would be the following: 1. Enter the parent parties’ incomes and the children. 2. Set custody with the first party, with the actual # of overnights that the 2nd party has assigned to 2nd party. 3. This would […]
How can I handle a net operating loss carryforward?
A net operating loss carryforward is an anticipated tax deduction in excess of regular taxes calculated by Family Law Software. If you want to focus on the income aspect, you can override the “Other income” line on View/Edit Taxes for each year in which the loss will be carried forward. Enter the amount of the […]