Support  Release Notes...

Release Notes for Version 5.13 released Sept 12, 2003

This version includes a number of enhancements designed to make the program more useful and more clear.

Especially noteworthy is the introduction in the Professional Edition of the "Analytics" topic (see below), which analyzes the financial situation and gives quick answers to frequently-asked-questions.

Financial Advisor (Professional Edition, Personal Bundles, and Personal "Financial Advisor" product)

Added two more tiers of alimony. Now there are up to three tiers of alimony, the same as child support.

The "What If/Alimony Support" was enhanced and renamed "Key Items of Income and Expense." This worksheet lets you change Wages, Living Expenses, Support and Alimony and see interactively (that is immediately) the effect on Net Income and Net Worth, over the 30 year time frame.

Updated the state tax calculations. Previously, state tax estimates were done by applying a "middle of the road" tax rate to a federal reference amount that usually was Adjusted Gross Income. Now, all state tax estimates are done by applying the state's current top marginal tax rate to a federal reference amount that usually is "taxable income." This will give better results in high-value cases, without sacrificing too much accuracy in lower-valuation cases. The user may modify both the state tax rate and the federal reference amount on a case-by-case basis to give an estimate that is more accurate in a particular case. The screen where this is changed is reached from a link at the bottom of the screen in the "Goals and Assumptions" topic. 

Added "Other Income" page. Added a new "Other Income" page to allow the entry of such items as Alimony or Support from previous relationships, bonuses, deferred compensation, unemployment compensation, and so on. This also allows flexibility to the software by giving the ability to enter any current or deferred item of income (payouts on buyouts, and so on). Each item of income may have a start year and an end year. In the Professional Edition, the new "Other Income" page is reached via a link from the pages in the Wages topic, which has been renamed "Wages and Other Income." In the Personal Editions, the questions come after the Wage questions in the Wages chapter.

Revised handling of a mortgage taken out in the current year for a home purchased in a prior year. We had treated this mortgage as a cash increase, where the cash was available to be divided between the parties (and used to finance a buyout of the home, for example). This was confusing in some cases. Now there is an additional "X" box, and we only treat the mortgage as a cash increase if the user specifically requests that we do so. Otherwise, it is treated as a purchase-money mortgage.

Simplified alimony by removing the option to have the program calculate alimony based on various factors. It was confusing and not much used. 


Professional Edition

Added Analytics topic. The "Analytics" topic is a new topic, and we believe it is a very valuable enhancement to Family Law Software. It allows quick interactive analysis of key issues, and performs calculations of frequently-asked questions. The analytics included in this release are the following:

• Key Items of Income And Expense: This analytic lets you change Wages, Living Expenses, Support and Alimony and see interactively (that is immediately) the effect on Net Income and Net Worth, over the 30 year time frame. All the other complexities of the situation are accounted for and remain as they are in the actual data entries. Thus, you can quickly answer questions like, "How much more does the party have to earn," "What if we increased support by $1,000?," "What if we cut living expenses by $300 a month." Use this analytic to help your clients negotiate, to better understand their alternatives, and to arrive at decisions or settlements that are acceptable to both parties.
    
• How Much Alimony Is Needed. This analytic lets you set targets for the recipient spouse (income after expenses; or gross income) and see how much alimony is required to reach that target. You may also set targets in terms of recipient income (percent of gross income or percent of income after expenses), and, again, see how much alimony that yields. Alimony is expressed both annually and monthly.
    
• Equalization Payment. In this analytic, you enter a target property division (50/50, 70/30, and so on). The program tells you how many dollars have to be re-allocated to reach that target. (The number of dollars is the "equalization payment.")
    
• Alimony Buy-out. This analytic calculates the after-tax present value of the proposed stream of alimony payments (1, 2 or 3-tier), given the discount (interest) rate to apply and accounting for the parties' actual federal tax rates and estimated state taxes. The present value is calculated for both spouses. (It will often be different for each spouse, because of their different tax rates.)
    
• Which Filing Status in Current Year. In this analytic, the program calculates for each spouse the after-tax net income that would result from every possible filing status. You can see which filing status is best and the dollar amount of the tax savings versus the next-best filing status. This can help the parties make decisions like whether it is worthwhile to try to file jointly in the last year together.
    
• Tax savings of Alimony vs. Child Support ("Family Support"). This analytic shows the tax savings that can be achieved if all the payments are designated as "alimony" as opposed to "child support." You can see the amount of the tax savings in the first year, and cumulatively each year over the next 30 years. This is especially useful in California, where the courts allow such a designation if there are tax advantages.
    
• Who Should Claim the Exemptions. This analytic compares the combined after-tax net income if one spouse claims the exemptions, compared to the other spouse. This shows the current and cumulative tax advantages to switching the exemptions between the spouses. This can answer questions like, "how much is it worth to get (or give up) the exemptions?"
    
• Does Alimony Recapture Apply? This analytic shows whether alimony recapture applies in the current situation, calculates the amount of recapture and the cost in tax dollars using the parties' actual marginal tax rates. It also lets you ask "what if" for recapture with up to three tiers of alimony, so that you may quickly structure an alimony payout that avoids recapture.
    
• Property Division. This analytic lets you see on one page how all the property items (securities, cash, residence, pension plans, personal property, businesses, IRAs, etc.) and all current debts are currently divided. Then, you can change any number and interactively see the effect on total property division. Use this to try different property division allocations and get to a property division allocation that is acceptable to both parties.

Revisions to data entry sheets. The data sheets now follow the data entry fields exactly (we think). Also, the sheets now refer to the parties by name (if you have typed in their first names) throughout. This is helpful in collaborative divorce or mediation situations, where terms like "client" and "spouse" may be inappropriate. We have removed all mention of the following terms from the Data Sheets: "Family Law Software," "Enter," "you," "we," "Chapter," and "Enter." The goal of this was to allow the data sheets to be used comfortably by client, paralegal, or professional advisor. 


Child Support Guidelines

California state tax parameters were updated for the California Child Support calculations.


Bugs Fixed

Fixed a typo on the residence mortgage screen: "This number should not include interest and taxes" should have been (and now is) "this number should not include insurance and taxes."

In some cases, where a spouse owned 100% of the residence, we were double-counting the value of the residence. That has been fixed.

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