Do Your Clients Understand The Tax Implications Of A Settlement?

Recently the U.S. Internal Revenue Service announced that it would be increasing the number of audits on tax returns that include alimony either paid or received. A report from the Treasury Inspector General found that in 2010 over $2 billion of alimony was not reported correctly. So what does that mean to you as a family law attorney? You aren’t a tax accountant and yet it’s still important you offer at least a little token advice to your clients about the tax implications of divorce and financial settlements.

Alimony Vs. Child Support

To most clients, alimony and child support are pretty much the same thing: a check from one ex to another. However to the IRS they are very different. Alimony is income; child support is not. That means alimony is deductible to the payor, and must be reported as income by the recipient so it can be taxed. Child support is “invisible” in the eyes of the IRS, neither deductible nor taxable.

Attorneys use this to their advantage. They can trade off alimony and child support to create a tax-optimized settlement. Family lawyer software like Divorce Financials makes it easy for family law attorneys to analyze a host of alimony and child support scenarios to find the one optimal for the client, and often even for the ex.

Should You Get Involved?

You are an attorney so you already know that you have to be careful what kind of advice you give. You should recommend that your client speak with a tax professional about how the divorce will change their tax situation, but does that mean you shouldn’t say anything at all?

It may be worth stating the tax difference between alimony and child support. You don’t need to get into long explanations about why they are different or the financial implications of various plans, but a simple observation that alimony can be deducted or must be reported, depending on whether your client is paying or receiving, can be enough to give the client a head start.

Specialized divorce financial software gives you to tools you need to optimize a property settlement or support agreement but software doesn’t take the place of old-fashioned good advice. A carefully chosen word, along with a disclaimer that you are not a tax professional, can help your client avoid a mistake in the future.

Download an evaluation copy of Divorce Financials and try the tax optimization and other tools to see how easy it is to create a fair settlement.

Posted by Rick Kabra on in Divorce Financials | Comments Off

Does Technology Help Or Hinder Your Practice?

You’ve probably run into the frustrating paradox of technology: new systems make hard things easy but sometimes make easy things hard. Users clamor for new features and companies add them, only to end up making devices too complicated to use. This is just as true in the world of NY child support software as it is in the world of smartphones or automobile dashboards.

Technology Should Make Life Easier

It’s tempting to jump on every technology bandwagon that comes along. Each nifty new device or piece of software suddenly becomes something you must have, even though you’ve practiced without it for years. After all, those people in the commercial sure look happy!

Unfortunately the reality often doesn’t match the fantasy of the advertisements — shocking, I know! New software can be frustratingly difficult to use, and may require you to completely revamp your practice operations to accommodate the new system.

What Do You Need?

Do you really need a cell phone that butters your toast for you? Don’t be tempted by every new feature that comes along. Something may sound cool, but if you never actually use it in your practice or if it makes basic family law activities harder, then you are only hurting yourself.

Before evaluating new NY family law software, take a moment to think about what your needs are. Where do you have problems? What tasks eat up your day? What are the core activities of your practice? New York family law attorneys, for example, spend a lot of time filling out the Statement of Net Worth. How much easier does this tool make that job?

Prepare For A Learning Curve

On the other hand, it’s not unusual even for a good system to slow things down at first. You are used to doing things a certain way and it will take time to get used to the new software. Give it some time, give it an honest chance, and you might be pleasantly surprised how quickly you can accomplish things with the new tool. You didn’t learn the law in a day; don’t expect to learn your software that quickly.

EzSupport-NY is specialized NY divorce software produced by Easy Soft. It has been designed to meet the needs of New York family law practices, and to do so in a way that is easy to learn and yet very powerful. Try EzSupport-NY with no obligation to see if this software makes your job easier rather than harder.

Posted by Rick Kabra on in Divorce Financials, NY Family Law Software | Comments Off

Online Tools Help With Collaborative Divorce

Collaborative divorce is becoming popular in New York because it can save couples time, money and headaches. The growth of online technology and the availability of easy to use NY child support software such as EzSupport-NY has streamlined the collaboration process and made it easier than ever. Here are a few basic tools New York attorneys should look for when offering collaborative divorce.

Information Collection – Using a web portal to gather data for the NY net worth statement allows couples to enter financial and other information from the comfort of their own homes, as well as giving a central information resource that ensures everyone is working from the same figures. EzSupport-NY includes NY AutoFill, a secure cloud-based service for data collection. Information can be imported into EzSupport-NY with a click, saving hours of the attorney’s time.

Document Collaboration – When couples can work out custody and other arrangements together, they are less likely to object to the settlement later. Free options such as Google Docs or Titan Pad allow people to work on documents simultaneously. Evernote has a low monthly cost for business users but allows more options in the kinds of files that can be edited or viewed.

File Sharing – If you don’t need realtime collaboration, you can use cloud file sharing service such as box.net, Dropbox or KeepandShare. Clients take turns examining and changing documents as needed until an agreement can be reached. If nothing else, file sharing can be used to share PDF files or other static documents with everyone concerned. Each of these services has a free option but family law attorneys will probably need to features of a premium subscription.

Conferencing – Face-to-face meetings are inconvenient and not really necessary in the modern world. Conferencing options such as Google+ Hangouts (free), Skype (low monthly fee) and GoToMeeting (higher monthly fee but includes features such as a shared screen to view documents) allow all parties to collaborate from home, work or anywhere else they can get internet access.

Gone are the days of hundreds of “reply all” emails that clutter your inbox with multiple copies of documents. Modern online tools and NY matrimonial law software such as EzSupport-NY simplify collaborative divorce and allow couples to split amicably, sparing the children the stress of an ugly separation.

Posted by Rick Kabra on in Divorce Financials, NY Family Law Software | Comments Off

Need Focus in Your Real Estate Career? Have a Baby!

I saw a post on the internet the other day where a guy said he had pasted a photo of his baby daughter on his speedometer and called it “the best speed regulator ever”. New babies have a way of changing our perspective about our driving habits, our health and our careers. You can’t keep working those 60-70 hour weeks and still gives your family attention. You need a tool like Easy HUD to give you more time.

Ironically a lot of people go into real estate because they think it will give them more time with their families. Unfortunately the reality of finding clients, shopping for listings, and of course filling out huge stacks of paperwork eats into that time. The flexibility to work when you want becomes the prison of feeling obligated to work seven days a week. You find yourself using time at home to catch up on HUD forms or 1099-S filings or going over your books to make sure all the payments on that last transaction got made.

Frankly part of the reason self-employed real estate professionals have so much trouble is because they aren’t running their businesses like businesses. And that’s fine when you are young and single and fancy free. However once you get married, and especially once the kids start coming, you have to start finding ways to run your business more professionally and using the tools at your disposal, tools like HUD settlement statement software.

Easy HUD streamlines your practice and speeds your closings so you have more time to find other clients, to spend days with your family, or to get back into that hobby you gave up years ago. Organize your days more effectively, work something akin to the hours people with real jobs work, and get less stressed about there being only 24 hours in a day.

Easy HUD is a great tool but it’s only a tool. You need to take charge of your workflow. Get organized. Find the right partners such as brokers, attorneys and inspectors — people who make your job easier rather than harder. Think ahead and don’t neglect looking for new sales even as you are closing on the current ones.

And if you ever need inspiration, paste a photo of your baby to your computer as the best work regulator ever.

Easy Soft products are developed to help you do your job faster, more accurately and more effectively. Try Easy HUD settlement statement software today and take the first step in finding more time for your baby.

Posted by Rick Kabra on in HUD Software | Comments Off

Billionaire Divorce Client? You Need the Right Software

In what is being called the most expensive divorce in history, Russian entrepreneur Dmitry Rybolovlev will be paying just over $4.5 billion — that’s “billion” with a B — to his wife, Elena. Now you may not have many billionaire clients in your family law practice, but you probably have your share of couples with above average wealth. You need dedicated divorce software for attorneys such as Divorce Financials to ensure these fortunes are handled correctly.

Equitable Distribution – Assets and liabilities have to be divided fairly, which doesn’t always mean evenly. When dealing with huge estates this can be complicated as you track long lists of assets of varying values. Divorce Financials family law software lets you list as many assets and liabilities as you need to ensure the entire estate is accounted for in the final balance. It is easy to trade off assets as needed to get a final total that is fair to both parties.

Alimony Calculation – Alimony is typically calculated based on standard of living. Use the Lifestyle Analysis tool to see how the receiving spouse has been living and calculate a spousal support settlement that will support this standard. It can be shocking to see these six- and seven-figure alimony amounts, but these are fair settlements for the standard of living the spouse has experienced. You can also calculate an alimony buyout, since it might be better for all concerned for the payor to give a lump sum so both parties can move on with their lives.

Tax Optimization – Taxes become important to the very rich, since a few percentage points can add up to massive amounts of money. The most common way to optimize taxes is to balance alimony, which is taxable, with child support, which is not. It’s easy to prepare reports that show the real costs, including taxes, of any support settlement. Compare up to five alimony and child support settlements side by side so you can quickly pick out the arrangement that is best for your client.

Now wait, you might be saying, these are the same considerations I give to my less wealthy clients. That’s true. At its core, a wealthy divorce isn’t that different than a poverty divorce. There are simply more beans to count. Whether your clients are fast food moguls or fast food workers, you can depend on Divorce Financials family attorney software by Easy Soft to help you find the right settlement.

Posted by Rick Kabra on in Divorce Financials | Comments Off

When Can You Issue A Revised GFE?

The Good Faith Estimate (GFE) was the centerpiece of the 2010 RESPA Final Rule. Easy Soft redeveloped Easy HUD after the new rules, and the new version made it easy for users to prepare a GFE and compare it to the HUD. Agents and attorneys who don’t pay attention to the GFE during HUD-1 settlement are going to find themselves in serious trouble down the road. However what if there is a problem with your original estimate? Are you allowed to change it?

Why Revise The GFE?

Even if there is a mistake, should you bother revising the Good Faith Estimate once it’s issued? Well the main reason to consider it is that if there is an error in the GFE and the actual fees are greater than the tolerances for given categories (and some of those tolerances are 0%), then the lender is responsible for those fees.

If the false information causes the estimate to have been high then there is no reason to revise the GFE. The law allows people to charge less than the estimate! If the fees are going to be within the tolerance limits then there is no reason to revise the estimate either, which is nice for fees like homeowner’s insurance. If the overage is going to be small then it might not be worth it to revise the GFE. However for large overages you might be allowed to change the GFE values in Easy HUD real estate settlement software.

Reasons Allowing Revised GFEs

RESPA rules do allow real estate professionals to revise a GFE under certain rare circumstances that include acts of God or acts of war. The latter are pretty much non-existent in this country and even the former, such as unanticipated increases in costs after a natural disaster, are extremely rare. However there is at least one other circumstance that allows a revised GFE: inaccurate information.

Sometimes buyers or, more often, sellers are “creative” in the information they provide. Other times they simply make mistakes. Bad information can also come from any of the many other entities involved in a property sale. When the lender discovers the information provided was inaccurate then they have a change of circumstance that permits them to revise the GFE.

Find out how easy it is to create and change GFE values with Easy HUD, Easy Soft’s HUD preparation software. Try the product for yourself and generate closing documents more quickly, accurately and efficiently.

Posted by Rick Kabra on in HUD Software | Comments Off