Presenter: Frank Napolitano, J.D., CFP®, CFA, and Rick Miller, Ph.D., CFP May 14th 10:40 – 11:30 AM
Title: The lifetime balance sheet: A holistic approach to settlement agreements
Duration: 50 minutes
The traditional balance sheet summarizes a household’s net worth – total assets minus total liabilities – at a specific point in time. By contrast, a lifetime, or economic, balance sheet summarizes lifetime assets and liabilities.
While divorce professionals have traditionally relied on the traditional balance sheet to divide property in a divorce, this approach has major shortcomings which, if ignored, can lead to unfair and even unsustainable settlements. As an alternative, we recommend incorporating the lifetime balance sheet into the divorce process.
In this presentation, Rick Miller, Ph.D., CFP®, will introduce the theory of life-cycle economics and the concept of “consumption smoothing”. Attendees will gain a deeper understanding of how families manage their resources over the entire lifecycle. Frank Napolitano, J.D., CFP®, CFA, will then show, with examples, how the traditional approach leads to short-term decisions that can have negative long-term (expensive) consequences for clients. Attendees will learn how incorporating a lifetime balance sheet approach into the divorce process can make them more valuable divorce professionals and improve client outcomes.