Financial Plan. George J Jones. Marianne P Jones. for. and 4/4/2011

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Prepared by Carrie D. W ilson, CFP ®, CDFA 4/4/2011 George J Jones & Marianne P Jones Page 1

Financial Plan

for

George J Jones

and

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Financial Plan

Husband: George J Jones Wife: Marianne P Jones Date: 04/04/2011 - 10:20am

Case: 44-32323 Harold J Jones vs. Marianne P Jones Judge: Marion Winslet, phone: 610-333-2323

Court: Family Court

333 Monroe St Court address 222 Newtown, PA 19323

Phone: 610-333-2222 Fax: 222-333-4444 Prepared by: Carrie D. Wilson, CFP ®, CDFA

TX

Phone: 972.444.9944

Email: carrie@clarkwatershardy.com Contact & Background Information

George J Jones

SSN: 444-55-3333 Birth Date: 4/5/1971

State where George J Jones lives: TX Address: 17 Merion Ln, Merion, TX 19333 Phone: 610-444-5555

E-mail: hjones@merrybuilders.com Marianne P Jones

SSN: 222-33-4444 Birth Date: 11/20/1974

State where Marianne P Jones lives: TX Address: 40 Winding Way, Berwyn, TX 19434 Phone: 610-333-2222

E-mail: marianne55@hotmail.com

Children Tiffany

Birth Date: 4/5/1999

Tiffany is a child of this relationship.

Tiffany is young enough to be eligible for child support. George J Jones will claim the tax exemption.

Tiffany will be a tax exemption until 21. Amber

Birth Date: 12/2/2003

Amber is a child of this relationship.

Amber is young enough to be eligible for child support. George J Jones will claim the tax exemption.

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Table of Contents (cont.)

(47) Spousal Maintenance Received Backup Reports for Expense Line Items

(48) Income on Accumulated Savings (49) Living Expenses

(50) Life Insurance Premiums (51) Major Expenses

(52) Spousal Maintenance Paid (53) Child Support Paid

(54) Debt Payments

Backup Reports for Net Worth / Property Line Items (55) Investment Assets

(56) Cars and Personal Effects (57) Equity in Real Estate (58) Life Insurance Assets (59) Business Assets (60) IRA / 401(k) Assets (61) Defined Benefit Pension (62) Note (Debt) Between Spouses

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One-Page Summary

Monthly totals for George J Jones or Marianne P Jones.

Total Income George Marianne

Wages and Salary $14,583 $4,117

Child Support Received 0 1,875

Spousal Maintenance Received 0 1,000

All Other Income 667 208

TOTAL INCOME 15,250 7,200

Total Expenses

Child Support Paid 1,875 0

Spousal Maintenance Paid 1,000 0

All Other Expenses 6,539 6,869

TOTAL EXPENSES 9,414 6,869

Taxes

Federal Income Tax 3,579 291

State Income Tax 0 0

Local Tax on Wages 0 0

FICA/Medicare Tax 595 233

TOTAL TAXES 4,174 523

Budget Net Income

BUDGET NET INCOME 1,662 -192

Property

Marital Property 130,402 72,426

Separate Property 0 83,644

TOTAL PROPERTY $130,402 $156,070

Miscellaneous

Number of Dependents 2 0

Filing Status Filing Separate Head Hsld

Spousal Maintenance paid, % of gross income 7 0

Child Support paid, % of gross income 12 0

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Division of Marital Property

Property division report for George J Jones and Marianne P Jones.

George Marianne Total

Amount Pct Amount Pct Amount

Real Estate Equity 40 Winding Way (1)

$40,000 $40,000 $80,000

Total Value $450,000 1st Mortgage $320,000

Equity $130,000

Vacation Home $81,250 $0 $81,250

Equity $81,250

Total Real Estate Equity $121,250 75% $40,000 25% $161,250

Cash & Investments

Cash-Equivalent Investments:

First Union -- -- $1,875

Bank of America (2) _-- _-- _$0

Bank of America -- -- $3,292

Total Cash-Equivalent $0 0% $0 0% $5,167

Other Investments:

Vanguard Index 500 -- -- $12,755

Nuveen Bond Fund -- -- $10,000

Municipal Bonds -- -- $20,000

Total Other Investments $0 0% $0 0% $42,755

Total Investments $0 0% $0 0% $47,922

Businesses

Mary Kay franchise $0 $0 $0

Total Businesses $0 0% $0 0% $0

Cars and Personal Effects

Jewelry $1,500 $0 $1,500

Paintings (3) _$700 _$0 _$700

Honda civic -- -- $21,000

Toyota Corolla -- -- $24,000

Total Personal Items $2,200 100% $0 0% $47,200

Subtotal Non-Retirement $123,450 76% $40,000 24% $256,372

IRAs and 401(k)s

Vanguard IRA $12,555 $0 $12,555

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Division of Marital Property (cont.)

Defined Benefit Pensions

School district $0 $38,029 $38,029

Total Pensions $0 0% $38,029 100% $38,029

Subtotal Retirement $12,555 25% $38,029 75% $50,584

Total Assets $136,005 64% $78,029 36% $306,956

Debts

MasterCard Bank Two ($1,728) ($1,728) ($3,456)

VISA Country Card ($3,875) ($3,875) ($7,750)

Total Debt ($5,603) 50% ($5,603) 50% ($11,206)

Total Debts ($5,603) 50% ($5,603) 50% ($11,206)

Total Assets $136,005 64% $78,029 36% $306,956

Total Debts ($5,603) 50% ($5,603) 50% ($11,206)

Total Marital Property $130,402 64% $72,426 36% $295,750

Equalization Payment ($28,988) $28,988

Total Marital After Equalization $101,414 50% $101,414 50%

Note: $92,922 is unallocated. Also, "Total Amount" column may not add due to rounding.

Footnotes:

(1) 40 Winding Way - Marianne will remain in the marital home.

(2) Bank of America - Funds from Inheritance, kept separate. Value is as of most recent bank statement.

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Division of Marital Property (cont.)

Division of Marital Property:

George property after payment $101,414 - (50.0%).

Marianneproperty before payment $72,426 - (35.7%).

Equalization Payment $28,988 (14.3%).

George

Marianne Equalization Payment

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Projected After-Tax Cash Flow

Projected After-Tax Cash Flow for George J Jones or Marianne P Jones for 10 years.

George Marianne George Marianne

2011 $ 19,946 ($ 2,305) 2016 $ 31,366 ($ 10,366)

2012 $ 25,421 ($ 3,427) 2017 $ 35,635 ($ 48,015)

2013 $ 22,512 ($ 4,961) 2018 $ 38,428 ($ 55,220)

2014 $ 23,975 ($ 5,158) 2019 $ 43,850 ($ 66,500)

2015 $ 25,404 ($ 5,390) 2020 $ 45,473 ($ 73,308)

George Marianne

$-20,000

$-40,000

$-60,000

$-80,000 $0 $20,000 $40,000 $60,000

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Projected Net Worth

Projected Net Worth for George J Jones or Marianne P Jones for 10 years.

George Marianne George Marianne

2011 $ 160,180 $ 170,170 2016 $ 385,743 $ 292,882

2012 $ 201,177 $ 194,616 2017 $ 446,967 $ 280,058

2013 $ 241,149 $ 218,619 2018 $ 513,788 $ 262,012

2014 $ 284,451 $ 243,780 2019 $ 589,091 $ 234,813

2015 $ 331,210 $ 270,160 2020 $ 669,379 $ 202,912

George Marianne

$0 $200,000 $400,000 $600,000 $800,000

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Summary Totals Spreadsheet

George Summary Totals Spreadsheet

INCOME ASSETS & DEBT

Year Age Total Total Total After Tax Accum. Fin Equity in IRA / Other Net

Income Expenses Taxes Cash Savings Assets Real Est. 401(k) Assets/Debt Worth

2011 40 183,000 112,962 50,092 19,946 19,946 0 130,009 13,183 (2,958) 160,180

2012 41 186,922 114,432 47,069 25,421 46,165 0 143,621 13,842 (2,451) 201,177

2013 42 191,099 115,925 52,662 22,512 70,524 0 157,966 14,534 (1,875) 241,149

2014 43 195,281 117,451 53,855 23,975 97,320 0 173,091 15,261 (1,221) 284,451

2015 44 199,603 119,006 55,193 25,404 126,617 0 189,046 16,024 (477) 331,210

2016 45 204,067 114,217 58,484 31,366 163,048 0 205,891 16,825 (21) 385,743

2017 46 208,812 112,753 60,424 35,635 205,205 0 223,680 17,666 416 446,967

2018 47 213,801 112,895 62,478 38,428 251,841 0 242,480 18,549 918 513,788

2019 48 218,992 108,577 66,565 43,850 305,765 0 262,356 19,476 1,494 589,091

2020 49 224,477 110,281 68,723 45,473 363,469 0 283,303 20,450 2,157 669,379

Marianne Summary Totals Spreadsheet

INCOME ASSETS & DEBT

Year Age Total Total Total After Tax Accum. Fin Equity in IRA / Other Net

Income Expenses Taxes Cash Savings Assets Real Est. 401(k) Assets/Debt Worth

2011 37 86,400 82,428 6,277 (2,305) 0 23,291 105,362 0 41,517 170,170

2012 38 87,405 83,073 7,759 (3,427) 0 20,324 128,090 0 46,202 194,616

2013 39 88,406 83,727 9,640 (4,961) 0 15,481 152,182 0 50,956 218,619

2014 40 89,395 84,396 10,157 (5,158) 0 10,256 177,734 0 55,790 243,780

2015 41 90,399 85,076 10,713 (5,390) 0 4,598 204,849 0 60,713 270,160

2016 42 85,420 85,397 10,389 (10,366) (6,101) 0 233,635 0 65,348 292,882

2017 43 83,486 120,017 11,484 (48,015) (54,116) 0 264,211 0 69,963 280,058

2018 44 83,171 126,253 12,138 (55,220) (109,336) 0 296,704 0 74,644 262,012

2019 45 78,383 133,167 11,716 (66,500) (175,836) 0 331,249 0 79,400 234,813

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Budget Report for 2011

Budget Report for George J Jones and Marianne P Jones for 2011

This report shows George's and Marianne's income, taxes, expenses, including spousal maintenance income and child support income, including spousal maintenance expenses and child support expenses.

George Marianne

Monthly Monthly

Income

Red Rock, LLC $14,583.33 $0.00

School district 0.00 4,116.67

Bonuses 666.67 0.00

Total Wage and Non-Wage Income $15,250.00 $4,116.67

Investment Income

Bank of America $0.00 $41.67

Total Investment Income $0.00 $41.67

Business Income

Mary Kay franchise $0.00 $166.67

Total Business Income $0.00 $166.67

Support Received

Child Support Received $0.00 $1,875.00

Spousal Maintenance Received $0.00 $1,000.00

Total Support Received $0.00 $2,875.00

TOTAL INCOME $15,250.00 $7,200.00

Mortgage Payments

40 Winding Way $0.00 (1) _$3,750.00 (1)

Vacation Home 0.00 200.00

Total Mortgage Payments $0.00 $3,950.00

Living Expenses

Union Dues $0.00 $20.00

Rent 1,200.00 900.00

Homeowners' Insurance 66.67 0.00

Real Estate Tax 0.00 250.00

Cable TV 40.00 50.00

Internet Access 80.00 0.00

Painting/Wallpapering 50.00 0.00

Household Supplies 70.00 0.00

Maid/Cleaning Service 325.00 0.00

Lawn Service 0.00 100.00

Utilities - Electricity 75.00 100.00

Utilities - Oil Heat 100.00 66.67

Car Payments 500.00 350.00

Car Insurance 1,200.00 41.67

Car Gasoline/Oil 130.00 0.00

Car Maintenance and Repair 75.00 0.00

Car License/Stickers 50.00 0.00

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Budget Report (cont.)

Public/Alt. Transportation 43.33 0.00

Child Care - Day Care 0.00 476.67

Child Education Lunches 100.00 0.00

Bank Fees 4.17 0.00

Cell Phone 90.00 70.00

Clothes 400.00 0.00

Charitable 83.33 0.00

Church/Synagogue/Mosque etc 83.33 0.00

Dues/Clubs 83.33 0.00

Entertainment 86.67 0.00

Food/Groceries 216.67 346.67

Gifts 41.67 0.00

Hair 30.00 0.00

Laundry 3.00 0.00

Legal and Accounting 200.00 0.00

Previous Relship Child Support 200.00 0.00

Restaurants 130.00 0.00

Subscriptions, Books 80.00 0.00

Toiletries/Grooming/Drug Store 86.67 0.00

Vacations 166.67 0.00

Health Insurance 120.00 0.00

Medical/Doctor 0.00 50.00

Dental 100.00 0.00

Drug & Prescription 87.00 0.00

Total Living Expenses $6,440.83 $2,821.67

Payments on Debt

MasterCard Bank Two $37.58 $37.42

VISA Country Card 60.08 59.92

Total Payments on Debt $97.67 $97.33

Support Paid

Child Support Paid $1,875.00 $0.00

Spousal Maintenance Paid 1,000.00 0.00

Total Support Paid $2,875.00 $0.00

TOTAL EXPENSES $9,413.50 $6,869.00

Taxes

Federal Taxes $3,579.33 $290.50

FICA & Medicare $595.00 $232.58

State Taxes (estimate only) $0.00 $0.00

Local Wage Tax $0.00 $0.00

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Budget Report (cont.)

Total Income $15,250.00 $7,200.00

Minus Total Expenses (9,413.50) (6,869.00)

Minus Total Taxes (4,174.33) (523.08)

BUDGET NET INCOME $1,662.17 $(192.08)

Footnotes:

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View/Edit Taxes for 2013

Single Head Hsld Filing Status in 2013

3 1 Number of exemptions

Income:

181,713 51,295 Wages and salary.

462 Taxable interest income.

462 406 Taxable dividend income.

12,000 Spousal Maintenance income. 2,205 Business and farm income.

462 Capital gain taxable.

Other gains and losses.

Taxable IRA and pension income. Rent, royalty, partnership, S corporation. Social Security taxable.

8,000 Other income.

191,099 65,906 Taxable gross income.

Adjustments:

Payroll deductions for health, etc. IRA/401k deduction.

Moving expenses.

156 Deduction of 1/2 of self-employment tax.

Part of health insurance for self-employed people.

12,000 Spousal Maintenance paid.

Interest on education loans. Other deductions.

12,000 156 Total adjustments.

179,099 65,750 Adjusted Gross Income ("AGI") = gross income - total adjustments).

Itemized Deductions:

3,825 623 Total medical expenditures.

10.0 10.0 Info only: Medical expense threshold % (7.5% or 10.0%, depending on year and age). 17,910 6,575 Info only: Medical expense threshold = Medical expense threshold % * AGI

Deductible medical (= medical expenses in excess of threshold).

0 0 State income taxes.

Local income taxes. 3,115 Real estate taxes. 19,612 Mortgage interest.

2,076 Charitable contributions.

52 249 Miscellaneous, subject to 2% AGI threshold. miscellaneous, after 2% AGI threshold.

Miscellaneous, not subject to 2% AGI threshold. 2,076 22,727 Itemized deductions before phase-out.

2,036 22,727 Itemized deductions after phase-out.

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View/Edit Taxes (cont.)

Exemptions:

11,400 3,800 Deduction for exemptions before phase-out. 11,172 3,800 Deduction for exemptions after phase-out.

Tax Before Credits and Other Taxes:

161,927 39,223 Taxable Income

= AGI - greater of itemized or standard deductions - exemptions. 43,035 5,884 Tax before credits and other taxes (from tax table or formula).

31 15 Marginal federal tax bracket (%)

Non-refundable Credits:

480 Child care credit. Hope education credit. Lifetime learning credit.

Child credit, after phase-out, non-refundable portion.

480 Total non-refundable credits (reduce tax, but not below zero). Refundable Credits:

Child credit, after phase-out, refundable portion. Earned income credit.

Making work pay credit.

Hope credit, refundable portion. Total refundable credits

(can reduce tax below zero and generate a payment from the IRS). Other Taxes on Form 1040:

Tax on retirement plan premature distribution.

0 0 Alternative minimum tax.

Lump-sum distribution 5- or 10- year averaging. 312 Self-employment tax.

0 Unearned Income Medicare Contribution.

Total Federal Income Tax:

= tax before credits and other taxes - total nonrefundable credits (down to zero) - total refundable credits

+ other taxes on Form 1040

43,035 5,716 Total Federal Income Tax.

23 9 Average federal tax rate (= Fed Tax / Gross Income) (%) Taxes Not on Form 1040:

6,876 3,180 FICA Taxes.

2,751 744 Medicare Taxes.

0 0 State Income Tax (estimate only)

Local Wage Tax.

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View/Edit Taxes (cont.)

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After-Tax Cash Flow Spreadsheet

George After-Tax Cash Flow Spreadsheet

Year Age Wages & Non-Wage Income on Total Living Spousal Child Payments Total Pre-tax

Salary Income Accum Svg Income Expenses Maint. Pd. Supt Pd on Debt Expenses Cash flow

2011 40 175,000 8,000 0 183,000 77,290 12,000 22,500 1,172 112,962 70,038

2012 41 178,325 8,000 597 186,922 78,761 12,000 22,500 1,171 114,432 72,490

2013 42 181,713 8,000 1,386 191,099 80,254 12,000 22,500 1,171 115,925 75,174

2014 43 185,166 8,000 2,115 195,281 81,780 12,000 22,500 1,171 117,451 77,830

2015 44 188,684 8,000 2,919 199,603 83,334 12,000 22,500 1,172 119,006 80,597

2016 45 192,269 8,000 3,798 204,067 84,919 6,000 22,500 798 114,217 89,850

2017 46 195,922 8,000 4,890 208,812 86,532 6,000 19,500 721 112,753 96,059

2018 47 199,645 8,000 6,156 213,801 88,174 6,000 18,000 721 112,895 100,906

2019 48 203,438 8,000 7,554 218,992 89,856 0 18,000 721 108,577 110,415

2020 49 207,303 8,000 9,174 224,477 91,560 0 18,000 721 110,281 114,196

George After-Tax Cash Flow Spreadsheet

Year Age Federal FICA / Total After-tax

Inc Tax Soc Sec Taxes Cash

2011 40 42,952 7,140 50,092 19,946

2012 41 37,620 9,449 47,069 25,421

2013 42 43,035 9,627 52,662 22,512

2014 43 44,048 9,807 53,855 23,975

2015 44 45,202 9,991 55,193 25,404

2016 45 48,303 10,181 58,484 31,366

2017 46 50,019 10,405 60,424 35,635

2018 47 51,844 10,634 62,478 38,428

2019 48 55,698 10,867 66,565 43,850

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After-Tax Cash Flow Spreadsheet (cont.)

Marianne After-Tax Cash Flow Spreadsheet

Year Age Wages & Business Fin. Child Spousal Total Living Major Mortgage Payments

Salary Income Invest. Support Maint. Income Expenses Expenses Payments on Debt

2011 37 49,400 2,000 500 22,500 12,000 86,400 33,860 0 47,400 1,168

2012 38 50,339 2,100 466 22,500 12,000 87,405 34,504 0 47,400 1,169

2013 39 51,295 2,205 406 22,500 12,000 88,406 35,158 0 47,400 1,169

2014 40 52,270 2,315 310 22,500 12,000 89,395 35,827 0 47,400 1,169

2015 41 53,263 2,431 205 22,500 12,000 90,399 36,508 0 47,400 1,168

2016 42 54,275 2,553 92 22,500 6,000 85,420 37,200 0 47,400 797

2017 43 55,306 2,680 0 19,500 6,000 83,486 37,908 33,502 47,400 719

2018 44 56,357 2,814 0 18,000 6,000 83,171 38,627 35,178 47,400 719

2019 45 57,428 2,955 0 18,000 0 78,383 39,365 36,936 47,400 719

2020 46 58,519 3,103 0 18,000 0 79,622 40,112 38,783 47,144 719

Marianne After-Tax Cash Flow Spreadsheet

Year Age Accum Debt Total Pre-tax Federal FICA / Total After-tax

Interest Expenses Cash flow Inc Tax Soc Sec Taxes Cash

2011 37 0 82,428 3,972 3,486 2,791 6,277 (2,305)

2012 38 0 83,073 4,332 3,908 3,851 7,759 (3,427)

2013 39 0 83,727 4,679 5,716 3,924 9,640 (4,961)

2014 40 0 84,396 4,999 6,158 3,999 10,157 (5,158)

2015 41 0 85,076 5,323 6,639 4,074 10,713 (5,390)

2016 42 0 85,397 23 6,237 4,152 10,389 (10,366)

2017 43 488 120,017 (36,531) 7,253 4,231 11,484 (48,015)

2018 44 4,329 126,253 (43,082) 7,827 4,311 12,138 (55,220)

2019 45 8,747 133,167 (54,784) 7,322 4,394 11,716 (66,500)

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Liquidations to Cover Negative Cash Flow

Liquidations to Cover Negative Cash Flow report for George J Jones or Marianne P Jones. The "liquidation" amount is the amount of investments and IRA/401(k) that

is used to cover negative cash flow (expenses in excess of income) and downpayments on homes to be purchased in the future.

The software first sells securities, then distributes from the IRA/401(k) plan(s). Upon each liquidation sale, the software sells a bit extra to pay for taxes on the sales. Data Entries:

YES Distribute accumulated savings to cover downpayment? YES Sell securities to cover downpayment?

YES Distribute accumulated savings to cover negative cash flow? YES Sell securities to cover negative cash flow?

YES Distribute from IRA/401(k) to cover negative cash flow?

Liquidations of Securities and IRA/401(k):

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Accumulated savings distributed

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Plus: Securities sold

George 0 0 0 0 0 0 0 0 0 0

Marianne 2,459 3,666 5,453 5,689 5,966 4,736 0 0 0 0

Plus: IRA/401(k) distributed

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Equals: Total Liquidations

George 0 0 0 0 0 0 0 0 0 0

Marianne 2,459 3,666 5,453 5,689 5,966 4,736 0 0 0 0

Less: Incremental federal and state tax (including penalties)

George 0 0 0 0 0 0 0 0 0 0

Marianne 154 239 492 531 576 471 0 0 0 0

Equals: Liquidation Available for Negative Cash Flow

George 0 0 0 0 0 0 0 0 0 0

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Liquidations to Cover Negative Cash Flow (cont.)

Assets Used to Cover Negative Cash Flow

George Marianne

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

(22)

Accumulated Savings

Accumulated Savings report for George J Jones or Marianne P Jones.

Accumulated Savings is the account for reinvested earnings that are not spent, and also for deficits (negative Accumulated Savings), which reflect borrowing to cover expenses and taxes. Real Estate sale and refinance proceeds and downpayments affect Net Worth through additions to or subtractions from the Accumulated Savings account.

Liquidations of assets increase the Accumulated Savings account by offsetting deficits which would otherwise have to be covered by borrowing.

Accumulated Savings are also appreciating at 4.00% (George) / 4.00% (Marianne). Accumulated Savings:

Accumulated savings at end of the previous year

George 0 19,946 46,165 70,524 97,320 126,617 163,048 205,205 251,841 305,765

Marianne 0 0 0 0 0 0 (6,101) (54,116) (109,336) (175,836)

Plus: Appreciation on previous accumulated savings at (4.00% (George) and 4.00% (Marianne)).

George 0 798 1,847 2,821 3,893 5,065 6,522 8,208 10,074 12,231

Marianne 0 0 0 0 0 0 0 0 0 0

Plus or Minus: Current year after-tax cash

George 19,946 25,421 22,512 23,975 25,404 31,366 35,635 38,428 43,850 45,473

Marianne (2,305) (3,427) (4,961) (5,158) (5,390) (10,366) (48,015) (55,220) (66,500) (73,308)

Plus: Real estate sale or refinance proceeds

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Minus: Current year down payment on real estate

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Minus: Tax paid when accumulated savings are liquidated to cover negative cash flow and downpayments

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Plus: Investment assets transferred in to cover negative cash flow (net of tax on sale of investments)

George 0 0 0 0 0 0 0 0 0 0

Marianne 2,305 3,427 4,961 5,158 5,390 4,265 0 0 0 0

Plus: IRA assets transferred in to cover negative cash flow (net of tax on IRA distribution)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Equals: End of year accumulated savings

George 19,946 46,165 70,524 97,320 126,617 163,048 205,205 251,841 305,765 363,469

Marianne 0 0 0 0 0 (6,101) (54,116) (109,336) (175,836) (249,144)

Calculating Untaxed Appreciation on Accumulated Savings at End Of Year Before Liquidations:

Untaxed appreciation at end of prior year, after liquidations (see below)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Plus: Appreciation on previous accumulated savings at 4.00% (George) and 4.00% (Marianne)).

George 0 798 1,847 2,821 3,893 5,065 6,522 8,208 10,074 12,231

Marianne 0 0 0 0 0 0 0 0 0 0

Equals: Untaxed appreciation at the end of the current year, before liquidations

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Accumulated Savings (cont.)

Marianne 0 0 0 0 0 0 0 0 0 0

Calculating Untaxed Appreciation at End of Year After Liquidations, and Tax Paid:

(a) Accumulated savings at end of the previous year (see above)

George 0 19,946 46,165 70,524 97,320 126,617 163,048 205,205 251,841 305,765

Marianne 0 0 0 0 0 0 (6,101) (54,116) (109,336) (175,836)

(b) Untaxed appreciation at the end of the current year, before liquidations (see above)

George 0 798 1,847 2,821 3,893 5,065 6,522 8,208 10,074 12,231

Marianne 0 0 0 0 0 0 0 0 0 0

(c) Accumulated savings liquidated to cover after-tax cash deficit and downpayments

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

(d) Percent of accumulated savings liquidated: (c) / (a) (rounded here)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

(e) Untaxed appreciation used (sold) in the liquidation: (d)*(b)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

(f) Untaxed appreciation at end of year, after liquidations: (b)-(e)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

(g) Tax paid on liquidation: (e) * (KG rate + state tax rate) = (e) * (e.g., 15.00% (George) and 15.00% (Marianne) in 2011)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

Figuring Amount of Accumulated Savings Used to Cover Negative Cash Flow:

(a) Amount liquidated

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

(b) Less: Tax paid on liquidation of accumulated savings (see above)

George 0 0 0 0 0 0 0 0 0 0

Marianne 0 0 0 0 0 0 0 0 0 0

(c) Equals: Amount of accumulated savings used to cover negative cash flow and downpayments

George 0 0 0 0 0 0 0 0 0 0

(24)

Net Worth Spreadsheet

George Net Worth Spreadsheet

Year Age Fin. Cars / Equity in IRA / Defined Accum. Net

Assets Furn. Real Est. 401(k) Benefit Debt Savings Worth

2011 40 0 2,200 130,009 13,183 0 (5,158) 19,946 160,180

2012 41 0 2,200 143,621 13,842 0 (4,651) 46,165 201,177

2013 42 0 2,200 157,966 14,534 0 (4,075) 70,524 241,149

2014 43 0 2,200 173,091 15,261 0 (3,421) 97,320 284,451

2015 44 0 2,200 189,046 16,024 0 (2,677) 126,617 331,210

2016 45 0 2,200 205,891 16,825 0 (2,221) 163,048 385,743

2017 46 0 2,200 223,680 17,666 0 (1,784) 205,205 446,967

2018 47 0 2,200 242,480 18,549 0 (1,282) 251,841 513,788

2019 48 0 2,200 262,356 19,476 0 (706) 305,765 589,091

2020 49 0 2,200 283,303 20,450 0 (43) 363,469 669,379

(25)

Net Worth Spreadsheet (cont.)

Marianne Net Worth Spreadsheet

Year Age Fin. Cars / Equity in IRA / Defined Accum. Net

Assets Furn. Real Est. 401(k) Benefit Debt Savings Worth

2011 37 23,291 0 105,362 0 46,673 (5,156) 0 170,170

2012 38 20,324 0 128,090 0 50,852 (4,650) 0 194,616

2013 39 15,481 0 152,182 0 55,031 (4,075) 0 218,619

2014 40 10,256 0 177,734 0 59,210 (3,420) 0 243,780

2015 41 4,598 0 204,849 0 63,389 (2,676) 0 270,160

2016 42 0 0 233,635 0 67,568 (2,220) (6,101) 292,882

2017 43 0 0 264,211 0 71,747 (1,784) (54,116) 280,058

2018 44 0 0 296,704 0 75,926 (1,282) (109,336) 262,012

2019 45 0 0 331,249 0 80,105 (705) (175,836) 234,813

2020 46 0 0 367,815 0 84,284 (43) (249,144) 202,912

(26)

Key Entries and Assumptions

This report presents the key assumptions behind the income and asset projections for George J Jones and Marianne P Jones.

Key Rates

1. Inflation. . . 1.9 % 2. George - Interest rate of return on accumulated (re-invested) savings. . . 1.00 % 3. George - Dividend rate of return on accumulated (re-invested) savings. . . 1.00 % 4. George - Capital Gain income rate on accumulated (re-invested) savings. . . 1.00 % 5. George - Tax-free income rate of return on accumulated (re-invested) savings. . . 0.00 % 6. George - Appreciation on accumulated (re-invested) savings. . . 4.00 % 7. George - Interest rate on borrowing to cover excess spending . . . 8.00 % 8. Marianne - Interest rate of return on accumulated (re-invested) savings. . . 1.00 % 9. Marianne - Dividend rate of return on accumulated (re-invested) savings. . . 1.00 % 10. Marianne - Capital Gain income rate on accumulated (re-invested) savings. . . 1.00 % 11. Marianne - Tax-free income rate of return on accumulated (re-invested) savings. . . 0.00 % 12. Marianne - Appreciation on accumulated (re-invested) savings. . . 4.00 % 13. Marianne - Interest rate on borrowing to cover excess spending . . . 8.00 % Taxes

1. Federal taxes are calculated on a detailed basis using the tax laws for each year, including Earned Income Credit, Alternative Minimum tax, and phase-outs currently enacted.

2. Taxes for George J Jones

Federal and state filing status for 2011. . . Married Filing Separately Filing status for subsequent years. . . Single

State taxes are estimated by applying the current tax table to gross income. 3. Taxes for Marianne P Jones

Federal and state filing status for 2011. . . Head of Household Filing status for subsequent years. . . Head of Household State taxes are estimated by applying the current tax table to gross income.

Assumptions Relating to Children

Custody Tax Exemption

1. Tiffany.. . . Marianne George 2. Amber.. . . Marianne George Assumptions Relating to Child Support

1. George paying child support through 4/2017. . . $ 1,875 per month 2. Then, child support through 12/2021. . . $ 1,500 per month Assumptions Relating to Spousal Maintenance

1. George paying spousal maintenance through 12/2015. . . $ 1,000 per month 2. Then, spousal maintenance through 12/2018. . . $ 500 per month Real Estate Assumptions - 40 Winding Way

1. Market Value. . . $450,000 2. Rate of appreciation of property. . . With Inflation 3. This property will not be sold in the time frame under consideration.

4. There is a first mortgage with a current mortgage balance of $320,000. 5. This mortgage will be paid by Marianne.

(27)

Key Entries and Assumptions (cont.)

Real Estate Assumptions - Vacation Home

1. Market Value. . . $100,000 2. Rate of appreciation of property. . . With Inflation 3. This property will not be sold in the time frame under consideration.

4. There is a first mortgage with a current mortgage balance of $18,750. 5. This mortgage will be paid by Marianne.

Assumptions Relating to Wages George

Red Rock, LLC:

1. Wage amount and period. . . $175,000 / year 2. Rate of increase of wages. . . With Inflation 3. Retirement age. . . 65

Marianne School district:

1. Wage amount and period. . . $950 / week 2. Rate of increase of wages. . . With Inflation 3. Retirement age. . . 65

Assumptions Relating to Major Expenses

1. Tiffany's college expense will start on 1/1/2017, run for 4 years.

The annual cost is $25,000 in present dollars, and will increase at a rate of 5.0%. Marianne P Jones will pay 100% of this expense.

2. Amber's college expense will start on 1/1/2021, run for 4 years.

The annual cost is $25,000 in present dollars, and will increase at a rate of 5.0%. Marianne P Jones will pay 100% of this expense.

Assumptions Relating to Cash & Investments

1. First Union [Checking]: The current market value is $1,875.

The annual income from this asset is $0. The annual rate of appreciation is 0.0%. 2. Vanguard Index 500 [Mutual fund]: The current market value is $12,755.

The annual income from this asset is $1,000. The annual rate of appreciation is 8.0%. 3. Bank of America [Checking]: The current market value is $25,000.

The annual rate of return is 2.0%. The annual rate of appreciation is 3.0%. 4. Nuveen Bond Fund [Bond fund]: The current market value is $10,000.

The annual rate of return is 4.6%. The annual rate of appreciation is 0.0%. 5. Municipal Bonds [Tax-exempt]: The current market value is $20,000.

The annual rate of return is 2.2%. The annual rate of appreciation is 0.0%. 6. Bank of America [Checking]: The current market value is $3,292.

Assumptions Relating to IRAs and 401(k) Plans

1. Vanguard IRA. The current value is $12,555, and the growth rate is 5.0%. The age at which distributions will start for George J Jones is 65. George J Jones will take minimum distributions at retirement. Assumptions Relating to Defined Benefit Pensions

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Key Entries and Assumptions (cont.)

The plan is owned by Marianne P Jones. The monthly benefit is $945.

This assumes the participant works until the cut-off date and begins receiving payments at age 65. The discount rate is 4.32%.

We are using mortality table RP-2000. Assumptions Relating to Debts

1. MasterCard Bank Two. The current balance is $3,456. The current rate is 12.000%. The monthly payment is $75.00.

2. VISA Country Card. The current balance is $7,750. The current rate is 14.000%. The monthly payment is $120.00.

(29)

Observations

** High Priority Issues Tax

Alternative Minimum Tax The Alternative Minimum Tax (AMT) applies for George in 2011. The software is using the statutory AMT threshold, which calls for a jump up in AMT this

year and in future years. Every year, though, in December, Congress has lowered the tax -- but just for the year then ending. On the "View/Edit Taxes" Report, at the

Alternative Minimum Tax line, you may "X" a box to indicate that you think Congress will continue to lower the tax each year. This may dramatically affect the Alternative

Minimum Tax computation. This is a hard call: you are predicting the future. We have no recommendation either way.

** Other Observations Tax

Exemptions May Not Benefit Party The Alternative Minimum Tax (AMT) applies for George in 2011. One effect of the Alternative Minimum Tax may be to offset the tax benefit of

claiming the exemption for children. If you see that a party's tax does not change when you give that party the exemption for a child, the AMT may be the reason. The same thing applies also to state taxes, property taxes, medical deductions, and the standard

deduction.

Cash Flow / Budget Report

Accumulated Debt Interest Expense Marianne has "Accumulated Debt Interest Expense" in at least one year in the cash flow projections. This note explains what that is and, if you wish, how to remove it. In a nutshell, "Accumulated Debt Interest Expense" is borrowing to cover negative cash flow. When expenses and taxes are more than income, a party has negative cash flow. In the software, as in real life, when there is negative cash flow, we first spend down prior Accumulated Savings (if any), then we sell Cash & Investments, then we liquidate IRAs and 401ks. If we have exhausted those assets, we borrow. This borrowing results in negative Accumulated Savings. The interest on this borrowing results in "Accumulated Debt Interest Expense." You may change the rate of this interest on the Assumptions screen. If you change the rate of this interest to zero, there will be no interest on the borrowing, and this column will disappear.

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Total Property Division (Marital plus Separate)

Real Estate Equity 40 Winding Way (1)

$40,000 $90,000 $130,000

Equity $130,000

Vacation Home $81,250 $0 $81,250

Equity $81,250

Total Real Estate Equity $121,250 57% $90,000 43% $211,250

First Union -- -- $1,875

Bank of America (2) _-- _$25,000 _$25,000

Bank of America -- -- $3,292

Total Cash-Equivalent $0 0% $25,000 100% $30,167

Other Investments:

Vanguard Index 500 -- -- $12,755

Nuveen Bond Fund -- -- $10,000

Municipal Bonds -- -- $20,000

Total Other Investments $0 0% $0 0% $42,755

Total Investments $0 0% $25,000 100% $72,922

Businesses

Mary Kay franchise $0 $0 $0

Total Businesses $0 0% $0 0% $0

Personal Items

Jewelry $1,500 $0 $1,500

Paintings (3) _$700 _$0 _$700

Honda civic -- -- $21,000

Toyota Corolla -- -- $24,000

Total Personal Items $2,200 100% $0 0% $47,200

Subtotal Non-Retirement $123,450 52% $115,000 48% $331,372

Vanguard IRA $12,555 $0 $12,555

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Total Property Division (Marital plus Separate) (cont.)

Property Statement report for George J Jones and Marianne P Jones.

School district $0 $46,673 $46,673

Total Pensions $0 0% $46,673 100% $46,673

Subtotal Retirement $12,555 21% $46,673 79% $59,228

Total Assets $136,005 46% $161,673 54% $390,600

Debts

MasterCard Bank Two ($1,728) ($1,728) ($3,456)

VISA Country Card ($3,875) ($3,875) ($7,750)

Total Debt ($5,603) 50% ($5,603) 50% ($11,206)

Total Debts ($5,603) 50% ($5,603) 50% ($11,206)

Total Assets $136,005 46% $161,673 54% $390,600

Total Debts ($5,603) 50% ($5,603) 50% ($11,206)

Total Property $130,402 46% $156,070 54% $379,394

Note: $92,922 is unallocated. Also, "Total Amount" column may not add due to rounding.

Footnotes:

(32)

Total Property Division (Marital plus Separate) (cont.)

Property Division:

George - $130,402 - (45.5%).

Marianne - $156,070 - (54.5%). George

(33)

Marital and Separate Property

This report shows for George J Jones and Marianne P Jones, each item of property, its current value, allocation between marital and separate, and who is keeping it. It also shows totals for each property type.

Total Total Total George Marianne

Equity Marital Separate Total Total

Real Estate Equity (*)

40 Winding Way (1) $130,000 $80,000 $50,000 $40,000 $90,000

Vacation Home $81,250 $81,250 $0 $81,250 $0

Real Estate Equity (*) $211,250 $161,250 $50,000 $121,250 $90,000

Investments

First Union $1,875 $1,875 -- --

--Vanguard Index 500 $12,755 $12,755 -- --

--Bank of America (2) $25,000 $0 $25,000 -- $25,000

Nuveen Bond Fund $10,000 $10,000 -- --

--Municipal Bonds $20,000 $20,000 -- --

--Bank of America $3,292 $3,292 -- --

--Investments $72,922 $47,922 $25,000 $0 $25,000

Businesses

Mary Kay franchise $0 $0 $0 $0 $0

Personal Items

Jewelry $1,500 $1,500 $0 $1,500 $0

Paintings (3) $700 $700 $0 $700 $0

Honda civic $21,000 $21,000 -- --

--Toyota Corolla $24,000 $24,000 -- --

--Personal Items $47,200 $47,200 $0 $2,200 $0

IRA/401(k)

Vanguard IRA $12,555 $12,555 $0 $12,555 $0

Defined Benefit Pension

School district $46,673 $38,029 $8,644 $0 $46,673

Debts

MasterCard Bank Two ($3,456) ($3,456) $0 ($1,728) ($1,728)

VISA Country Card ($7,750) ($7,750) $0 ($3,875) ($3,875)

Debts ($11,206) ($11,206) $0 ($5,603) ($5,603)

Totals

Totals $379,394 $295,750 $83,644 $130,402 $156,070

% of Total Equity 100% 78% 22% 34% 41%

% of Total Allocated 132% 103% 29% 46% 54%

% of Marital Equity 100%

Total allocated (George J Jones total plus Marianne P Jones total): $286,472. Total unallocated: $92,922.

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Marital and Separate Property (cont.)

Sep Prop Sep Prop

George George To + / From - Marianne Marianne To + / From -Marital Separate George Marital Separate Marianne Real Estate Equity (*)

40 Winding Way (1) $40,000 $0 $0 $40,000 $50,000 $0

Vacation Home $81,250 $0 $0 $0 $0 $0

Real Estate Equity (*) $121,250 $0 $0 $40,000 $50,000 $0

Investments

First Union -- -- -- -- --

--Vanguard Index 500 -- -- -- -- --

--Bank of America (2) -- -- -- -- $25,000

--Nuveen Bond Fund -- -- -- -- --

--Municipal Bonds -- -- -- -- --

--Bank of America -- -- -- -- --

--Investments $0 $0 $0 $0 $25,000 $0

Businesses

Mary Kay franchise $0 $0 $0 $0 $0 $0

Personal Items

Jewelry $1,500 $0 $0 $0 $0 $0

Paintings (3) $700 $0 $0 $0 $0 $0

Honda civic -- -- -- -- --

--Toyota Corolla -- -- -- -- --

--Personal Items $2,200 $0 $0 $0 $0 $0

IRA/401(k)

Vanguard IRA $12,555 $0 $0 $0 $0 $0

School district $0 $0 $0 $38,029 $8,644 $0

Debts

MasterCard Bank Two ($1,728) $0 $0 ($1,728) $0 $0

VISA Country Card ($3,875) $0 $0 ($3,875) $0 $0

Debts ($5,603) $0 $0 ($5,603) $0 $0

Totals

Totals $130,402 $0 $0 $72,426 $83,644 $0

% of Total Equity 34% 0% 0% 19% 22% 0%

% of Total Allocated 46% 0% 0% 25% 29% 0%

% of Marital Equity 44% 24%

Total allocated (George J Jones total plus Marianne P Jones total): $286,472. Total unallocated: $92,922.

Total equity (Total allocated + Total unallocated): $379,394.

(*) Real Estate Footnotes:

(1) 40 Winding Way: Equity of $130,000 equals: current value of $450,000, less first mortgage of $320,000. (2) Vacation Home: Equity of $81,250 equals: current value of $100,000, less first mortgage of $18,750.

(35)

Marital and Separate Property (cont.)

Footnotes:

(1) 40 Winding Way - Marianne will remain in the marital home.

(2) Bank of America - Funds from Inheritance, kept separate. Value is as of most recent bank statement. (3) Paintings - Paintings have sentimental value to Marianne

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Marital Property Division on an After-Tax Basis

Total Marital Property After Tax:

George $ 125,882 (67.1%)

Marianne $ 61,778 (32.9%)

(a) (b) (c) (d) (e) (f) (g)

Pre-tax --- George --- ---

Marianne---Marital % % After Tax % % After Tax

Description Equity Kept Paid Equity Kept Paid Equity

In Tax (a*b*(1-c)) In Tax (a*e*(1-f))

Real Estate

40 Winding Way 80,000 50 0.00 40,000 50 0.00 40,000

Vacation Home 81,250 100 0.00 81,250 0 0.00 0

Total Real Estate 121,250 40,000

First Union 1,875 0.00 0 0.00 0

Vanguard Index 500 12,755 0.00 0 0.00 0

Bank of America 0 0.00 0 0.00 0

Nuveen Bond Fund 10,000 0.00 0 0.00 0

Municipal Bonds 20,000 0.00 0 0.00 0

Bank of America 3,292 0.00 0 0.00 0

Total Cash & Investments 0 0

Businesses

Mary Kay franchise 0 0 0.00 0 100 0.00 0

Total Businesses 0 0

Personal Items

Jewelry 1,500 100 0.00 1,500 0 0.00 0

Paintings 700 100 0.00 700 0 0.00 0

Honda civic 21,000 0.00 0 0.00 0

Toyota Corolla 24,000 0.00 0 0.00 0

Total Personal Items 2,200 0

Vanguard IRA 12,555 100 0.36 8,035 0 0.00 0

Total IRAs and 401(k)s 8,035 0

School district 38,029 0 0.28 0 100 0.28 27,381

Total Defined Benefit Pension 0 27,381

Debts

MasterCard Bank Two 3,456 50 0.00 1,728 50 0.00 1,728

VISA Country Card 7,750 50 0.00 3,875 50 0.00 3,875

Total Debts 5,603 5,603

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Tax Calculation

Taxes for George J Jones in 2011 are $50,092, and taxes for Marianne P Jones are $6,277.

Filing Separate Head Hsld Filing Status in 2011 3 1 Number of exemptions Income:

175,000 49,400 Wages and salary. 0 0 Taxable interest income. 0 500 Taxable dividend income. 0 12,000 Spousal Maintenance income. 0 2,000 Business and farm income. 0 0 Capital gain taxable. 0 0 Other gains and losses.

0 0 Taxable IRA and pension income. 0 0 Rent, royalty, partnership, S corporation. 0 0 Social Security taxable.

8,000 0 Other income.

183,000 63,900 Taxable gross income. Adjustments:

0 0 Payroll deductions for health, etc. 0 0 IRA/401k deduction.

0 0 Moving expenses.

0 123 Deduction of 1/2 of self-employment tax.

0 0 Part of health insurance for self-employed people. 12,000 0 Spousal Maintenance paid.

0 0 Interest on education loans. 0 0 Other deductions.

12,000 123 Total adjustments.

171,000 63,777 Adjusted Gross Income ("AGI") = gross income - total adjustments).

Itemized Deductions:

3,684 600 Total medical expenditures.

75 75 Info only: Medical expense threshold % (7.5% or 10.0%, depending on year and age). 12,825 4,783 Info only: Medical expense threshold = Medical expense threshold % * AGI

0 0 Deductible medical (= medical expenses in excess of threshold). 0 0 State income taxes.

0 0 Local income taxes. 0 3,000 Real estate taxes. 0 23,279 Mortgage interest. 2,000 0 Charitable contributions.

50 240 Miscellaneous, subject to 2% AGI threshold. 0 0 miscellaneous, after 2% AGI threshold.

0 0 Miscellaneous, not subject to 2% AGI threshold. 2,000 26,279 Itemized deductions before phase-out.

2,000 26,279 Itemized deductions after phase-out. 5,800 8,500 Compare: standard deduction.

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Tax Calculation (cont.)

Exemptions:

11,100 3,700 Deduction for exemptions before phase-out. 11,100 3,700 Deduction for exemptions after phase-out. Tax Before Credits and Other Taxes:

154,100 33,798 Taxable Income

= AGI - greater of itemized or standard deductions - exemptions. 39,580 4,384 Tax before credits and other taxes (from tax table or formula).

33 15 Marginal federal tax bracket (%) Non-refundable Credits:

0 1,144 Child care credit. 0 0 Hope education credit. 0 0 Lifetime learning credit.

0 0 Child credit, after phase-out, non-refundable portion.

0 1,144 Total non-refundable credits (reduce tax, but not below zero). Refundable Credits:

0 0 Child credit, after phase-out, refundable portion. 0 0 Earned income credit.

0 0 Making work pay credit.

0 0 Hope credit, refundable portion. 0 0 Total refundable credits

(can reduce tax below zero and generate a payment from the IRS). Other Taxes on Form 1040:

0 0 Tax on retirement plan premature distribution. 3,372 0 Alternative minimum tax.

0 0 Lump-sum distribution 5- or 10- year averaging. 0 246 Self-employment tax.

0 0 Unearned Income Medicare Contribution. Total Federal Income Tax:

= tax before credits and other taxes - total nonrefundable credits (down to zero) - total refundable credits

+ other taxes on Form 1040 42,952 3,486 Total Federal Income Tax.

23 5 Average federal tax rate (= Fed Tax / Gross Income) (%) Taxes Not on Form 1040:

4,486 2,075 FICA Taxes. 2,654 716 Medicare Taxes.

0 0 State Income Tax (estimate only) 0 0 Local Wage Tax.

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Tax Calculation (cont.)

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Five Year Projection

Projections for George J Jones or Marianne P Jones.

This table shows key income, expense and tax results projected for years, 1, 2, 3, 4, and 5. The graph below shows net worth projected for 10 years.

# Years 1 2 3 4 5

Year 2011 2012 2013 2014 2015

Total Income

George $183,000 $186,922 $191,099 $195,281 $199,603

Marianne $86,400 $87,405 $88,406 $89,395 $90,399

Total Expenses

George $112,962 $114,432 $115,925 $117,451 $119,006

Marianne $82,428 $83,073 $83,727 $84,396 $85,076

Total Taxes

George $50,092 $47,069 $52,662 $53,855 $55,193

Marianne $6,277 $7,759 $9,640 $10,157 $10,713

After-Tax Cash Flow

George $19,946 $25,421 $22,512 $23,975 $25,404

Marianne ($2,305) ($3,427) ($4,961) ($5,158) ($5,390)

Year-End Net Worth

George $160,180 $201,177 $241,149 $284,451 $331,210

Marianne $170,170 $194,616 $218,619 $243,780 $270,160

Net Worth Projected 10 Years

George Marianne

$0 $200,000 $400,000 $600,000 $800,000

(41)

Property Statement

Property Statement report for George J Jones and Marianne P Jones.

This report shows the combined assets and debts for George J Jones and Marianne P Jones, without any division of property.

Amount Real Estate Equity

40 Winding Way (1) _$130,000

Equity $130,000

Vacation Home $81,250

Equity $81,250

Total Real Estate Equity $211,250

First Union $1,875

Bank of America (2) _$25,000

Bank of America $3,292

Total Cash-Equivalent $30,167

Other Investments:

Vanguard Index 500 $12,755

Nuveen Bond Fund $10,000

Municipal Bonds $20,000

Total Other Investments $42,755

Total Investments $72,922

Businesses

Mary Kay franchise $0

Total Businesses $0

Personal Items

Jewelry $1,500

Paintings (3) _$700

Honda civic $21,000

Toyota Corolla $24,000

Total Personal Items $47,200

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Property Statement (cont.)

Property Statement report for George J Jones and Marianne P Jones. Amount

Vanguard IRA $12,555

Total IRAs and 401(k)s $12,555

School district $46,673

Total Pensions $46,673

Subtotal Retirement $59,228

Total Assets $390,600

Debts

MasterCard Bank Two ($3,456)

VISA Country Card ($7,750)

Total Debt ($11,206)

Total Debts ($11,206)

Total Assets $390,600

Total Debts ($11,206)

Total Property $379,394

Footnotes:

(43)

Property Valuations Report

Property Valuations report for George J Jones and Marianne P Jones. Real Estate and Mortgages:

George's Marianne's Value

Description Value Date Value Date To Use

40 Winding Way 400,000 3/10/2011 480,000 1/20/2011 450,000 Vacation Home 120,000 1/20/2011 85,000 3/10/2011 100,000

Investments, Checking Accounts etc.:

First Union 1,875

Vanguard Index 500 12,755

Bank of America 25,000

Nuveen Bond Fund 10,000

Municipal Bonds 20,000

Bank of America 3,292

Business:

Mary Kay franchise 0

Personal Effects:

Jewelry 1,500

Paintings 700

Honda civic 21,000

Toyota Corolla 24,000

Life Insurance:

IRA / 401k:

Vanguard IRA 12,555

Defined Benefit Pension:

School district 46,673

Debts:

MasterCard Bank Two 3,456

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Property Valuations (cont.)

(45)

Combined Income

This report shows the combined after-tax cash flow of George and Marianne for 2011.

Income or Expense 2011

Wages & Salary 224,400

Non-Wage Income 8,000

Business Income 2,000

Fin. Invest. 500

Income on Accum Svg 0

Total Income 234,900

Living Expenses 111,150

Major Expenses 0

Mortgage Payments 47,400

Payments on Debt 2,340

Accum Debt Interest 0

Total Expenses 160,890

Pre-tax Cash flow 74,010

Federal Inc Tax 40,782

FICA / Soc Sec 9,931

Total Taxes 50,713

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Budget Report for Children for 2011

The budget report for children lists all the living expenses for the children as well as any major expenses such as private schools or college which are for the children.

George Marianne Total

Expenses for Children per month per month per month

Child Care - Day Care. . . $0.00 $476.67 $476.67 Child Education Lunches. . . 100.00 0.00 100.00 Total of Expenses for Children . . . $100.00 $476.67 $576.67

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Sale of Real Estate - Property

No real estate properties are indicated as being sold.

(48)

Pension Valuation

This valuation is for Marianne P Jones's plan with School district. This report values the plan as of the valuation date, which is: 2/10/2011.

Based on the information entered (see below), the value of the pension as of the valuation date is: $46,673, using the RP-2000 mortality tables and a gender-specific approach.

As of 2/10/2011, 81.48% of this pension is so-called 'marital property.' Using a gender-specific approach, the marital amount of the pension plan is $38,029 (that is, 81.48% of $46,673).

____________________________________________________________ Value of Pension at Retirement:

The value of the pension is $166,911 (gender-specific approach) as of regular retirement age. This is typically more than the value as of the valuation date because, like money

in a bank account, a pension's value increases over time.

____________________________________________________________ This report is based on the following data entered:

Key Dates:

11/20/1974 Participant's birth date.

3/7/1998_{Date the participant was married.}

4,693_{Number of days from marriage to separation.} 4,693 Numerator of Coverture Fraction.

5,760 Denominator of Coverture Fraction.

4/5/1995_{Date the participant started in the plan.} 1/11/2011_{Date the employment stopped being 'marital.'}

(This is usually the separation date).

2/10/2011 Date to evaluate the plan.

(This should be the date on the pension benefits administrator's statement).

65 Participant's regular retirement age.

62 Participant's earliest retirement age.

NO_{Is the participant already retired and receiving benefits?}

The Plan:

$945 Estimated monthly benefit (actual benefit if already retired).

1.0%_{Cost of living adjustment (COLA) percent.} 4.32% Interest rate (also known as the "discount rate").

____________________________________________________________ Calculation Options Selected:

The pension benefit and marital portion are calculated "as if" the participant works until the cut-off date. "Cut-off" means the date after which the plan is no longer marital. This is typically the separation date. The pension's value is calculated assuming the participant retired or will retire on the regular retirement date. The participant is a female.

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(25) Pension Audit Trail

Pension Audit Trail 14:57:51 2/21/2011

Calculating present value of pension assuming employment through retirement.

Monthly benefit as of Earliest Retirement Age is $985 Using benefit as of EARLIEST retirement age.

Calculating pension value assuming employment through retirement: Number of years to earliest retirement date is 26.8822.

Number of years to regular retirement date is 29.8795. Using 26.8822 as the number of years to retirement. Using 62 as the retirement age.

Calculating the present value factors for an annual benefit payment of $1 as of retirement:

Calculating for gender MALE, using the RP-2000 Mortality Table, adjusted for projected declines in mortality.

The initial discount (interest) rate is 5.00%. The cost of living adjustment ("COLA") is 1.00%. Participant's age at retirement is 62.

Year 1: Age 62.

PV = Present value of $1 payment made at the end of year 1 = 1/(1+r), where r =0.0500. This is 1/1.0500, which equals 0.9524.

Calculating the present value of $1 payment discounted also for mortality, assuming the participant was alive at retirement:

This equals: PV * (1 - Probability of dying during the year for male gender, assuming the participant lived to retirement).

The probability is derived from the RP-2000 tables, adjusted for projected generational improvements in mortality (Scale AA).

From RP-2000, the probability of living to age 63, given that the participant lived to age 62 (retirement) is

1 - 0.0049 = 0.9951.

For year 1, age 62, the $1 payment discounted also for mortality is PV * 0.9951 = 0.9524 * 0.9951 = 0.9477.

The mortality-weighted present value of $1 paid in the n'th year is thus: B * D * (1 - E) * F, where:

B = COLA adjusted benefit = previous year's COLA adjusted benefit * (1 + COLA percent).

D = the cumulative discount rate. This is: 1/(1+r1) * 1/(1+r2) * 1/(1+r3) etc.

Note that, for example, the 5th year's cumulative discount rate = (the cumulative discount rate through year 4) * (1/(1+r) of the 5th year)

This is how it is represented below. In the two columns of Time Discount D, the first column is cumulative discount of prior years, and the second column is the (1/1+r) of the current year. This allows us to show variable discount rates. If you are using a single rate, this is the same as the standard 1/(1+r)^n

n = # years since retirement computed so far.

E = Probability of dying during current year given that participant lived through previous year. This value comes from the RP-2000 table. Note: (1 - E) = Probability of living through current year given that participant lived through previous year.

F = Probability of living through previous year given that participant lived through retirement.

Financial Plan. George J Jones. Marianne P Jones. for. and 4/4/2011

Financial Plan

for

George J Jones

and

Financial Plan

Table Of Contents

Table of Contents (cont.)

One-Page Summary

Division of Marital Property

Division of Marital Property (cont.)

Division of Marital Property (cont.)

Projected After-Tax Cash Flow

Projected Net Worth

Summary Totals Spreadsheet

Budget Report for 2011

Budget Report (cont.)

Budget Report (cont.)

View/Edit Taxes for 2013

View/Edit Taxes (cont.)

View/Edit Taxes (cont.)

After-Tax Cash Flow Spreadsheet

After-Tax Cash Flow Spreadsheet (cont.)

Liquidations to Cover Negative Cash Flow

Liquidations to Cover Negative Cash Flow (cont.)

Accumulated Savings

Accumulated Savings (cont.)

Net Worth Spreadsheet

Net Worth Spreadsheet (cont.)

Key Entries and Assumptions

Key Entries and Assumptions (cont.)

Key Entries and Assumptions (cont.)

Observations

Total Property Division (Marital plus Separate)

Total Property Division (Marital plus Separate) (cont.)

Total Property Division (Marital plus Separate) (cont.)

Marital and Separate Property

Marital and Separate Property (cont.)

Marital and Separate Property (cont.)

Marital Property Division on an After-Tax Basis

Tax Calculation

Tax Calculation (cont.)

Tax Calculation (cont.)

Five Year Projection

Property Statement

Property Statement (cont.)

Property Valuations Report

Property Valuations (cont.)

Combined Income

Budget Report for Children for 2011

Sale of Real Estate - Property

Pension Valuation

(25) Pension Audit Trail