I struggle to see how spending so much time on features like this make an impact in an agency. This falls into the video proposal category. 10 out of 10 agencies have their own way of determining an umbrella calculation. My opinion is agencies need innovation and integration. I can pull up an umbrella calculator on google.
Anonymous User
•
Aug 7, 2023
The formula I've used for years that originally came up in one of my classes for a Designation in the HNW space is: What is your net worth today outside of retirement accounts? PLUS, what is the NPV [Net Present Value] of you and your spouses next 10 years income [or take home pay X 10 and add a bit for inflation]. Why 10 years? See the comment on how long ones wages can be attached for a judgement. Most of the attorneys and family office folks I've worked with like this formula as a starting/talking point to make folks aware of their risk.
Also: Everyone has different Risk Tolerances. The above formula is meant to be a base, not the most one needs.
David Watson
Team•
Aug 3, 2023
Hey David,
10 Years appears to be the norm but it can go on for longer in some cases/states. Both the Feds and States can garnish wages. I don't think most of my HNW clients would have a Fed judgement but they could for taxes./student loans..
"A judgment is valid for 10 years and can be enforced at any time during that time. It is not uncommon for a creditor to seek to enforce a judgment that is close to ten years old. There are also ways to renew the judgment so that it can be enforced for even longer than ten years. It is important to remember that a judgment will continue to accrue interest. "
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Anonymous User
Aug 8, 2023
I struggle to see how spending so much time on features like this make an impact in an agency. This falls into the video proposal category. 10 out of 10 agencies have their own way of determining an umbrella calculation. My opinion is agencies need innovation and integration. I can pull up an umbrella calculator on google.
Anonymous User
Aug 7, 2023
The formula I've used for years that originally came up in one of my classes for a Designation in the HNW space is:
What is your net worth today outside of retirement accounts? PLUS, what is the NPV [Net Present Value] of you and your spouses next 10 years income [or take home pay X 10 and add a bit for inflation].
Why 10 years? See the comment on how long ones wages can be attached for a judgement.
Most of the attorneys and family office folks I've worked with like this formula as a starting/talking point to make folks aware of their risk.
Also: Everyone has different Risk Tolerances. The above formula is meant to be a base, not the most one needs.
David Watson
Aug 3, 2023
Hey David,
10 Years appears to be the norm but it can go on for longer in some cases/states. Both the Feds and States can garnish wages. I don't think most of my HNW clients would have a Fed judgement but they could for taxes./student loans..
"A judgment is valid for 10 years and can be enforced at any time during that time. It is not uncommon for a creditor to seek to enforce a judgment that is close to ten years old. There are also ways to renew the judgment so that it can be enforced for even longer than ten years. It is important to remember that a judgment will continue to accrue interest. "