Forsythes Litigation Support Present Value Calculator: Family Law Lump Sum Amount
The Forsythes Litigation Support "Present Value Calculator: Family Law Lump Sum Amount" can be used to propose the quantum of, or review the reasonableness of, settlement offers where there is a lump sum payment that will be made at some point in the future. Because a dollar today is worth more than a dollar tomorrow, the value of the future payment should be reduced to its present value, being its value in today's dollars. Once the value of the future payment is in today's dollars, it can be compared to the other assets and liabilities of the marriage and the appropriate percentage allocated to each party. If the future payment is not discounted to today's dollars, then both the value and the percentage of the matrimonial pool allocated to each party will be misleading. The factors that impact on the amount of the reduction are the length of the period, and the discount rate. The period will be determined by the date the payment is planned to be made. When entering a discount rate, consider what your client will receive or forgoe due to the delay in payment. For example, if the party expecting to receive the payment would use the funds to reduce a mortgage, then the interest rate on the mortgage would be the appropriate rate to use as the discount rate. For assistance with the calculator, or for more complex present value calculations, such as multiple lump sums over different periods, please contact Suzanne Bailey on (02) 4928 8426 or Nick Gaudion on (02) 4928 8404.
Enter the date for valuing the assets and liabilities, for example, today's date or the date of settlement
16-Jan-2009
(The date should be entered as DD-MMM-YYYY)
Enter the number of years, from today's date, when the lump sum amount will be received or paid OR Enter the date on which the lump sum will be received or paid Enter the Discount Rate Enter the Lump Sum Amount The Present Value of the Lump Sum amount is: $ $ 6.5% 100 100
(Should you require the calculator to determine the present value using the date on which the lump sum will be received, instead of the number of years, then the number of years should be left blank, or entered as the number "0".)
(The date should be entered as DD-MMM-YYYY. If this input box is utilised, then the number of years above should be left blank, or entered as the number "0")
The liability of Forsythes is limited by, and to the extent of, the Accountants' Scheme under the Professional Standards Act 1994 (NSW) This calculator has been produced solely as a general guide and does not constitute advice by Forsythes. Whilst the calculator has been prepared in good faith and with due care, no representation is made as to the accuracy of the schedule. No liability for negligence or otherwise is assumed by Forsythes for any loss or damage suffered by any party resulting from the use of this calculator.