Transcript

Carrie Tapia: You don’t have time to have your client testify about every single expense, but if you have a good FIS, you can get that admitted, and then the judge can see what their monthly expenses and monthly income really are.

Voiceover: You’re listening to the Texas Family Law Insiders podcast, your source for the latest news and trends in family law in the state of Texas. Now here’s your host, Attorney Holly Draper.

Holly Draper: Hi everybody. Welcome to the Texas Family Law Insiders podcast. Today I’m joined once again, by Carrie Tapia, who is one of my partners here at the Draper Law Firm. We’ve been on a little bit of hiatus with the podcast, and now we’re ready to dive back in. Today we’re going to do a little bit of back to basics.

We started doing that last year with some more basic podcast topics that would be really helpful for newer attorneys or attorneys who just wanted to get a refresh. And this topic was actually suggested to me by a newer attorney to Texas who thought this would be really helpful. So we are going to dive in.

And for anyone listening out there who thinks that they have a good podcast topic suggestion or guest suggestion, please send those to me because that really helps us figure out what our audience wants to listen to and what would be the most helpful.

But anyway, today we are going to talk about two financial type things, and the first one being financial information sheets. And then we’re going to flip over and do a bit of a deep dive into inventory and appraisement. So Carrie, can you just start and tell us what is a financial information sheet? Which some people might see referred to as an FIS.

Carrie: Yes. So a financial information sheet or FIS is how we look at the client’s monthly expenses and income. We usually end up dealing with these more at a temporary orders stage of the case, but they are also relevant on final for certain cases.

I think that this is a tool that a lot of people aren’t utilizing to its full extent possible, because it’s a great way to show the court what the client’s finances are really like. Especially in some counties where you’re on a time budget. You don’t have time to have your client testify about every single expense, but if you have a good FIS, you can get that admitted, and then the judge can see what their monthly expenses and monthly income really are.

Holly: So I will admit that I very rarely see these being used. Do you see them being used very much? Or do you think it’s a county by county thing where certain counties require them and others don’t?

Carrie: Well, I don’t know. It’s hard for me to say, because they’re definitely required in the counties that I practice in. I think that when I see them used, I think what I would say I see is I don’t see them used very well. I see, an attorney will have their client fill out a sheet of paper that just lists the basics.

Or some of our courts even have a form where they could just fill it out in the hallway outside the courtroom. And there’s just no way that you’re going to get a true picture of someone’s expenses. I mean, I couldn’t do that.

I couldn’t fill out what all of my expenses are just like that. So I think that they’re not used very well. What I like to do is we have a spreadsheet. We send it to our clients at the very beginning of the case. Almost every single case, we send these out because you’re going to need it eventually, and maybe if you don’t need it, I’d rather have it and not need it than need it and not have it.

So the spreadsheet, it lists out tons of different possible expenses. And we tell the clients, we don’t expect that you have every single one of these, but this is to get your brain turning so that way you don’t leave something out accidentally. And then I find that the judges think it’s really helpful to be really specific in what the line items are.

So instead of just saying cell phone, put cell phone for four adult children and spouse or cell phone for the kids, and just be more specific about what you’re actually, what this is. Because then the court can see why you have a $400 cell phone bill or whatever it might be.

Holly: Right. Because some expenses, if they’re pretty generically listed, might seem excessive or strange at first glance, but if we can give a little bit more detail, a little bit more information, it’s going to help hone in on why that expense is appropriate for our particular client.

So you said that we are going to use an FIS in almost every case. So if we’re talking a divorce, if we’re talking a child custody case, a divorce, maybe with no children, what are the circumstances when we really are going to want to use this?

Carrie: Again, always check your local rule and make sure that you’re following what the county requires. But you said a divorce with no kids. So there’s a divorce with no kids, and no one’s asking for any type of support, then you might not need it. A lot of the counties it says that you have to exchange it whenever somebody’s asking for a type of support.

But also, think that support doesn’t necessarily just mean temporary spousal support. A monthly payment from spouse A to spouse B. It could be who’s going to pay for the mortgage, who’s going to pay for the utility?

So it doesn’t necessarily have to just be statutory temporary spousal support. That can look different ways in different cases. I would say for divorce, even if there’s no kids, any time you’re talking about who’s paying bills, what we’re doing with expenses, you need a good FIS.

Holly: And even if you’re not going to have a temporary orders hearing, I think that could be really helpful in trying to reach temporary agreements, because if we have spouses that are currently living together, that are going to look to separate permanently, we need to figure out who’s paying for what, and can this couple afford these two households? I think even if you don’t have a temporary orders hearing coming up, it’s still a good idea to do this.

Carrie: Right. I mean, I started doing it, a lot of times, when you talk to opposing counsel early on in the case, like, hey, well, let’s exchange I&As. We’ll get to that in a minute. But I often also say, well, let’s also exchange financials. Let’s exchange either depending on the local rules for which county I’m in, or just spelling out, let’s exchange financial information sheets and three months of pay stubs or what have you, just to make sure that we’re getting everything paid that needs to get paid.

Holly: So you mentioned sending a client a spreadsheet to fill out. What other information do you ask clients to provide when you are going to do an FIS?

Carrie: Tax returns and pay stubs. W2s if you haven’t filed taxes. 1099s. Obviously if they’re self employed, you’re going to need a whole lot more information than just that, but definitely pay stubs, tax returns.

Holly: When you get an FIS from an opposing side. What are some effective ways of using that to benefit your client?

Carrie: Well, one of the ways can be, okay, well, they both have this so only one of them needs to pay that. So it can help narrow the issues. Okay, there’s no dispute about this expense. That’s more for negotiation at hearings.

It’s really fun to use them to catch maybe some lies or some misinformation, because it spells out what their expenses are. So what I do when we exchange exhibits before temporary orders hearing, I go through it with my client. Because my client’s gonna know a heck of a lot more about what that opposing party’s FIS should say than I do.

So I go through it. And we go through it. Does this sound right for this payment? Does this sound right? What do you think that this is bluffing? Another thing, a lot of times people, I don’t know how to describe it, other than double dip. And what I mean by that is, you put on groceries. I spend $2,000 a month on groceries.

But you pay for your groceries on your Visa, and then the line item credit card says, I spend $2,000 a month on my visa. Well, that’s the same $2,000, potentially. So looking at things like that to poke holes, and also be careful on your side so you don’t get those holes poked into your arguments, that can be helpful.

Holly: So not every court is going to require that you exchange exhibits beforehand. To what extent do you talk to your client about what you might find in the opposing party’s, or what you would expect to find in the opposing party’s FIS, if you’re not going to have that before showing up to court?

Carrie: A lot of times, especially if we’re talking about, they live together right now, and we’re trying to separate the households, I’ll have my client build out two financial information sheets. Let’s say I represent the wife, wife wants to move out.

I’ll have her fill out an FIS for the household expenses for the marital home that she’s trying to leave, and also her projected FIS for the apartment down the road that she plans on signing a lease for.

That way I have an idea of what, in this scenario, husband’s expenses are each month, and I can prepare for some of that. And then it’s also, again, helpful when I do get his in the middle of the hearing and I see where there’s a difference.

Holly: What do you do if you have the client who has no clue about their finances?

Carrie: Then discovery really soon. Yeah, that’s hard. We have a client that doesn’t have any clue about their finances. Sometimes you just do an average. I know how much I spend on my electric bill. I have them well, look and see if you can figure it out. If not, we’re gonna have to put an average. But if I’m doing that, in my description, I put estimate or I put projected.

You want to be very forthcoming with the court, for lots of reasons, obviously you don’t want to lie to the court. But also, if the judge is looking at that later, you don’t want them to think that that’s just in stone, solid, good to go. So I’ll put projected or estimated or based on to explain where I got that number if the client just has no idea.

Holly: Okay, so moving on to inventory and appraisement, otherwise known as an I&A, these are tools that I think I see used far more frequently than the FIS. I see inventories in almost all divorce cases. Can you explain what exactly an inventory and appraisement is?

Carrie: The detailed list that outlines all the assets and the debts of the community and separate estates.

Holly: So when do you try to exchange them in a divorce?

Carrie: It depends on the estate. I mean, if I’ve got a case where my client has a pretty good grasp of the estate, and we’re not dealing with a lot of waste claims or reimbursement claims, it’s just a house, couple retirement accounts, couple savings accounts and cars, I might set mediation first and then set the I&A exchange date for three, four weeks before mediation.

I’ll get to this later, but you have to update it for mediation anyways. You have to have fresh numbers. So if it’s a case where it’s maybe not that too complicated of an estate. Maybe the client’s a little bit on a budget. I don’t want to pay to do an I&A, in September, and then have to renew it in January, when we actually go to mediation. If you don’t have to.

There are cases where you’re going to have to. There are cases like you said, talking about the FIS, if a client has no idea what the estate is, I want to get that I&A sooner so I can start figuring out what the estate is, figuring out what discovery I need to send, figuring out where the holes are in their I&A to start trying to fill in. So it just depends on your client’s goals and the estate and the complexity of it.

Holly: I think it’s really important for people to understand that the values on certain things can fluctuate dramatically whereas other things don’t. So the value of your house is probably not going to change significantly over the course of a couple of months, but the value of a check account might change dramatically over the course of a month.

Depending on this was payday, and now it’s at its max, and then gets down to almost zero when all the bills are paid till the next payday comes along. So depending on the nature of the assets that are at issue, in your case, I think will control a lot of how up-to-date do you need to be? How much needs to really be updated before you start negotiating?

You certainly don’t want to be negotiating, if somebody has a really large monthly spend in their household, and their account fluctuates dramatically. You don’t want to be okay, I’m figuring there’s $50,000 in this account when it’s really going to be zero at the end of the month. And it’s just spending money.

They’re operating expenses, so to speak. So I think that’s a really important thing to keep in mind. Also, I think an often overlooked piece, especially when inventories are done early, is that an inventory can really be important when we’re talking about separate property claims, when we’re talking about reimbursement claims.

These are things that you might not really understand yet for the case, if you’re doing an inventory at the beginning and you don’t necessarily want to lock your client in that something is or is not separate, or that this is a value of a reimbursement claim, or that there are no reimbursement claims, only to turn around later and be like, oh, yeah, yeah, we just didn’t know yet. Or, my bad, that was wrong. What are your thoughts on that?

Carrie: Well, I agree completely. And that really comes back to, I think, what we’re going to talk about in a little bit, but meeting with your client early on about the inventory and appraisement. I think a lot of times, attorneys just send the worksheet to their client, and then the client fills it out, and then the paralegal cleans it up, and then that’s what you exchange.

The attorney might not even look at it. And I think that that’s really a disservice to the client, even in the simple estates. So what I would suggest, and what I think is best practice, is get them the worksheet, let them look through it, but then have a meeting with them and go through it with them. They don’t know what a reimbursement claim is.

That they’re going to leave that blank. Go through it and tell them what that is. I give some examples of what a reimbursement claim might look like. I give some examples of what may or may not be separate property, just that way, they have an understanding of what it is, and they can get their wheels turning earlier, rather than, oh, it’s time to sign. It’s due today.

And guess what? I just remembered that that money was from my dad that we used as a down payment for that house, and then it all blows up. So I think that communicating with your client early on about what this is and how important it is. That worksheet is like 60 pages. It is overwhelming. So getting it to your client early on and going through it with them will help avoid those last minute blow ups.

Holly: And I think truly explaining to clients about separate and community property and the different forms that can take, and how there can be things that are commingled or there could be down payments made with separate property. Your average layman does not understand that.

And if you don’t truly explain it, it is not unusual to show up at mediation, and all of a sudden it comes out in one room or another. Oh, yeah, that money came from my house that I owned before the marriage. Or I inherited this money from my grandpa, and now it’s okay, well, now nobody knows anything about this.

Can’t prove it right there in mediation. Are we just gonna all agree that $100,000 came from grandpa? So that is a step that I think a lot of people skip. Especially if you’re having a paralegal handle the bulk of the I&A task, you want to make sure that someone is really explaining this.

And then when you’re going through what the client sends you, you’re critically analyzing that to see if there’s something somewhere that might be broadly categorized or possible separate claim that they’re not claiming is separate. Things like that.

Carrie: Yeah. I mean, nothing messes up a mediation more than, oh, by the way, I’ve got this separate property claim. I mean, because then it could look like bad faith. It can. Even if it isn’t, it’s not going to go over well.

Holly: So we’re early in the process, and we know that we need to do an I&A with our client. What information should we be getting from our clients?

Carrie: You’re going to need to decide how far back of statements you’re gonna go. I would say one month at a minimum. A lot of times we try to forego more discovery by saying, oh, we’ll do six months. Or back during the initial disclosure stage, we’re like, oh well, we’ll just do the two years so talk with the inventory and appraisement that caused more problems.

But whatever. I think that definitely at least one month worth of statements as backup to show what you’re doing. And then with those documents, you want to make sure that you tell your clients, don’t write anything on these documents.

Don’t put sticky notes on them when you scan them in. I don’t need a screenshot. I need the actual statement. Not just the first page of the statement, the whole 12 pages. Even if nine of them are blank, because that’s how Bank of America wants to spend their time.

Holly: I think the sending of the screenshots is probably universally considered to be the biggest pet peeve of every family lawyer and paralegal in the world.

Carrie: Absolutely.

Holly: So anybody out there who might be listening to this, who is not an attorney, but who is a potential client of an attorney, never send screenshots.

Carrie: Oh, and also, save the PDF. Put in the name of the PDF what it is. I don’t want it to say December statement. I want it to say Chase 1234, December 2024. I want to know what it is.

Voiceover: This episode of the Texas Family Law Insiders podcast is sponsored by the Draper Law Firm, providing family law appellate representation across Texas. For more information, visit draperfirm.com or call 469-715-6801.

Holly: And sometimes, I was just saving a bunch of bank statements myself for a mortgage issue, and when you save them, they aren’t called what you would expect them to be called.

So you have to actually take that extra step of labeling it as whatever it is, or just a huge mess of numbers and letters and, makes the attorney spend a lot more time, or the paralegal a lot more time organizing things, if they have to go through and open every document to try and figure out what it is.

Talking about backup documents that we’re going to be asking for from our clients, they personally, I don’t know that one month statement gives you much information at all, other than just to prove this is the current value.

But there are some things that don’t have statements where we’re going to be trying to look for values. That could be a house, that could be a car, that could be a boat, any number of things that are not going to have statements. What kind of guidance do you give to clients on where to find those values?

Carrie: So for vehicles, go to KBB. You can put in the mileage and the make and all that, and that can get you something that’s worth working with. For houses, oh, man, our housing market is so crazy, it’s kind of hard to know. A lot of times well, it’s also going to depend on what your client’s goal is for the house, which value that you want to claim it as. But the appraisal value is often going to be different than Zillow, than Redfin, than whatever the other ones are, Open Door.

So there’s not just one way to do it. I’ve seen a lot of times I see people doing an average of those. I don’t necessarily hate that method. Like I said, I think it just really depends on what your client’s ultimate goal is for that property and how you want to evaluate. If we’re just going to sell it, then it doesn’t really matter.

Holly: But it’s worth what it’s worth. Unless you’re needing one person to be getting substantial equity out of the house, and the other is getting it from sending out a business or whatever, and they’re getting that value elsewhere. Sometimes, if we want to get a better idea, we may call up a realtor friend and say, hey, can you do a CMA for this house for us? Or have the client call a realtor friend and get a CMA for their house. I think, I really caution people from using Zillow.

I mean, I had my own house, not my current house, but a house that I owned before where Zillow was, like, $400,000 lower than what the house was worth. I mean, dramatically different. And I’ve heard a lot of people say things less or higher, Zillow being a problem. A lot of it, too, could depend on your county. Whether or not your tax appraised value is a legitimate value or not.

I live in Collin, and now I tend to think the tax appraisal value is pretty good, but there’s probably some other counties where that is not the case for one reason or another. So I wouldn’t just rely on what your client gives you. Your client just fills out the form and says, my house is worth a million dollars.

Okay, we need to dive in on this. Where did you get this number? Is that just because you think that’s what it’s worth? Try and figure it out. And a lot of clients might have a really good idea, because they watch the market. They’ve lived in that neighborhood for a long time. They have a really good idea of what it’s worth.

And we still kind of want to know why they think that. So then let’s see, there’s other kinds of things that are more difficult to value. A business, for example. I would be very careful if you are trying to put a value for a business and on inventory, especially if it’s early, maybe it’s TBD, because you don’t know yet what the value of that business is.

Same deal is with the house. What the client’s goal? Is this a business the client wants to keep? Is this a business that the other party’s going to keep? Is this a business they could sell? You need to look at those sorts of things to see what do I want to put on this inventory about that business?

Carrie: What do you want to have your client swear to?

Holly: I know, yeah.

Carrie: Businesses, unless it’s just like a mom and pop, small thing, I think I would just put TBD or especially early on, until you bring on an expert, because I don’t know what it’s worth.

Holly: And I think a lot of people, even as a business owner, don’t have any clue what it’s worth. Unless it is a commonly sold type of business where you can look up how much is it going to cost me to purchase this Chick Fil A franchise down the street. You can get a value relatively easily for that.

But for a lot of businesses that our clients have, how much of it is personal goodwill? Does that business exist without them? And if so, how much could it be sold for? What’s it really worth? Okay, so another issue I think attorneys really need to understand better when they are doing inventory oftentimes, is the types of accounts, such as retirement accounts.

Is something a defined benefit plan? Is it a defined contribution plan? What exactly are we looking at here? And your client may not know. They just know that I have this account from my employer, or have this pension, or I have whatever. So as the attorney, you need to see what you can figure out to properly categorize those types of accounts.

Carrie: Yeah, have them get their benefits guide from HR. Have them pull as many statements as they can online. It seems like everything’s with Fidelity. Fidelity has a lot of stuff online.

Holly: And if you don’t, as the attorney, if you don’t know, if you can’t tell what it is, there are so many attorneys out there who specialize in retirement account, specializing QDROs, and they want your business when you need a QDRO done, so they’re probably happy to look at something for you and tell you what it is and help you figure out exactly what you’re dealing with.

Carrie: And there’s a big difference in Roth IRAs and regular IRAs. Retirement can be a dangerous area if you don’t know what you’re looking at.

Holly: So when we were prepping for this, I reached out to our team and was like, hey, we’re gonna do a podcast on I&As, give me all your tips. And when our paralegals brought up having the client pull a credit report, and using that to, either they can use it to help complete the I&A, but also we can use it to compare to what the client has submitted.

One little caveat there is that the credit report data may not match the timing of when they are valuing things. So it could say that this person owes $10,000 on their American Express, but the client knows they already paid that bill, and so it’s a zero balance. So you need to work with the client on that to make sure it’s accurate.

But it can help you find other credit cards they might have forgotten about or, well, yeah, I forgot that we had a HELOC taken out on our house eight years ago. So I thought that was a really good suggestion.

Carrie: It can also be helpful to find out if maybe your spouse took out a credit card under your name that you didn’t know about.

Holly: Right. Because a lot of times we say that a settlement could look like everybody’s gonna pay everything in their name. So if you have not seen a credit report and confirmed that you know what is in the client’s name that’s taking a big risk. Okay, so one of the things I find people gloss over or don’t include would be personal property, furniture, things like that. How do you approach those types of items in cases?

Carrie: Well, a lot of that is going to depend on what type of case it is. And I don’t necessarily mean the type of estate. I mean the level that people want to invest in spending time on their inventory appraisement. I have had clients that told me how many forks and knives and spoons they had in a drawer. I’ve had clients that just leave it completely empty.

You don’t have a couch, you don’t have a bed, you don’t have anything? So again, I think it’s going to depend on the level of pettiness. And I would try not to say pettiness, yes, pettiness. But again, I think it just depends. Is it worth going through and listing everything?

If you got a brand new couch, it’s probably worth listing that couch. If you’ve had the couch for 10 years, and it’s not worth anything, it’s probably not worth it. If you’ve got collector’s items and things like that. Yes, we want to include that.

If you just have your cell phone, probably not. So it’s just, it depends on the case, it depends on the pettiness, it depends on the estate type. There are cases where you hire personal property appraisers to go do it for you. It’s just really case specific, in my opinion.

Holly: Yeah, and think a lot of it depends, how am I well, are these people? Are they the type of people who are going to be able to, we’ll just sort these for ourselves, not going to be a problem. Or are they the type of people that if it is not written down on this list, it is not leaving with you.

Also, I put these things into two categories. There’s the category of things that are really valuable. You have expensive jewelry, you have expensive artwork, firearms, things like that that have a pretty high value. And then there’s the stuff that probably has little to no actual value, but is important to your client, and they want to take it with them.

They want to make sure they get their grandmother’s whatever. I can’t think of a lot of good examples, but there are a lot of things that your random person would not care at all about this particular item, but that wife wants it badly.

Carrie: Emotional value.

Holly: Yes, exactly. So I think you want to make sure you have lists of both of those things, not necessarily to put a value on the things with emotional value, but just so that you know, when the time comes to start splitting things up, we got to make sure that grandma’s armoire ends up with the wife.

Carrie: And a big thing of that is if, let’s say, you have a spouse that’s already moved out of the marital residence, and they didn’t take everything that they want. What I’ll do is I’ll like, if it’s in the other party’s possession and you want it, I have to put an asterisk on it on the list.

That way I know that that’s what that means. That we need to make sure that we include that in the MSA or the decree, or whatever that wife is getting that from husband’s possession by x date, at x time, or, you know, spell that out. If they’ve already moved out and they’ve already got all their stuff, that’s different. Different situation.

Holly: I think if you have the client who left, they might have left in a stress situation, and they haven’t been back in the house really to, they might not even remember what was there. So it may be a situation where, you know we want before we can do an inventory, or there may be a lot of TBD on the inventory. And we need an opportunity for this client to go back in and take pictures and everything so they know what’s there and figure out what they want.

Carrie: Yeah, especially when you’ve got 10 days to temporary orders hearing.

Holly: So when it comes to these personal property, furniture, those sorts of things, it can be difficult to put a value on some of them, because even if you just bought that living room set yesterday, you cannot turn around and sell it for what you paid for it. I think a lot of clients don’t really understand that and don’t know how to value things. So how do you help clients, we can say, garage sale value? How do you help them figure out what that is?

Carrie: So two things with that. One I was going to mention is, when you have a lot of appliances like you buy a new refrigerator, you get a Lowe’s credit card, and you just pay it off each month. You need to make sure that the person getting the fridge is the person that’s responsible for that debt. Just wanted to mention that.

But to answer your question, Facebook marketplace is a great place to look and see what things are going for. Facebook marketplace, maybe eBay, if it’s more of a collector’s type thing. But it’s not really worth going to an expert about. Look at eBay, see what it’s going for. Look at Facebook marketplace or Craigslist, see what it’s going for.

I mean, that’s a good way to get garage sale prices ideas. See what other people in the area are selling it for, paying for it. But also it goes to same thing with the houses. What’s the goal of this? What are we trying to do with this? Is this husband’s prized possession that we know he’s going to want no matter what, or is this, something else?

Holly: So one other thing I think is really important, that needs to be included on every item that you’re putting on an I&A is the date of that valuation. And even though some things you think the house value doesn’t fluctuate that much.

But if we’re talking about doing inventory at the beginning, and then your divorce trial is not happening for nine months down the road, the value could change quite a bit. So when you want to know when was this value? Is there any need to update it depending on the type of asset that it was?

So we’ve done our inventory, we have passed it off to the other side, and now we are in possession of the other side’s inventory. What are you looking for when you were going through the opposing party’s inventory?

Carrie: I pull them up side by side, and I go through them together to see, okay, well, what did they include that we left off? What did we include that they left off? That’s another thing. When you’re meeting with your client to build the I&A, if they don’t know the account number, like, I know he has a Chase account, but I don’t know anything else about it.

Put that in the I&A as a placeholder and say, in husband’s possession. And that way, you know it’ll trigger you. Okay, well, she said that he has a Chase, but he didn’t include that Chase on his I&A. So, yeah, just looking at side by side, seeing where the values are the same, where the values are different, that can clue you in on where you might need to send some discovery.

Or maybe just depending on the level of intensity of the case, maybe just a phone call with a closing counselor, or send an email like, hey, we noticed that this wasn’t included. She thinks he has it. Can you follow up? And then with that, you build your spreadsheet that you use at mediation. So you’re looking at the inventory and appraisements.

I think it’s really helpful to have on your spreadsheet the value that we put and the value that they put, and then the value that we’re going to use for the actual division. That way, right there on the spreadsheet at mediation, it clues you in.

You can just tell just by looking, this is gonna be a point of contention. She thinks it’s worth this, he thinks it’s worth that. So that way you can start to kind of narrow down the moving parts and where the drama is gonna be.

Holly: So that brings us into the topic of the inventory spreadsheet. We call it a property division spreadsheet, depending on how we’re using it. Talk a little bit about what that looks like. I know we go to remediation a lot, and our spreadsheet looks like one thing, and their spreadsheet looks like another, and the mediator’s looks like another. How do you like to see spreadsheets and just talk a little bit about that.

Carrie: Well, like I said, I like for the spreadsheet to have what we think it’s worth, what they think it’s worth, and then, okay, this is what we’re going to use for the division. Some attorneys at mediation are really possessive of their spreadsheets, and say we have to use my spreadsheet.

I’m not going to do that, but I’m going to keep using my spreadsheet. Even if we’re going to use somebody else’s spreadsheet that’s going to be with, ultimately attached to the MSA or used as the final draft. I’m going to keep mine going because I know that, I know that my values are correct and I know that my equations are correct in my spreadsheet.

So I’ll keep using mine to analyze the offers. But it does create some double work, admittedly, but that’s really the only way that I feel comfortable advising my client, is if I’ve seen it on the spreadsheet that we built with our tools and that I know that’s correct.

Holly: I think if you’re doing that, you have to be really careful that whatever is being used by the mediator is, the agreement is actually what you think it is, if you’re using different spreadsheets. I’ve seen, I agree that I like having his value, her value, and then the value that we’re using for the division.

Because some things, there’s $1,000 in bank account X, okay, well, that’s not really up for debate, because it is what it is. But I’ve seen very different values on houses. I’ve seen very different values on businesses, on cars. And sometimes we don’t even have to decide. We have to look at, what are we dividing?

She says the house is worth 1.5 million. He says the house is worth $800,000 but everyone agrees we’re selling the house and splitting it 50/50, then you don’t even need to have a value. It’s just 50/50, to the husband and the wife. And we’re going to take that out of the equation.

Okay, so last little topic on this, and we’ve touched on it already, is the importance of updating your inventories. You want to make sure that you are using the most up to date information. I will have clients the morning of mediation going into that computer, giving me this is exactly how much this credit card is at right now.

This is exactly how much this checking account has in it right now, so that we are sure that there’s not going to be this missing money that wasn’t accounted for because we were using a week’s old data. I think with trial that it’s a little bit more difficult if you have to exchange exhibits in advance. If you’re supposed to have updated information. I’m sure it varies widely amongst county to county and practice to practice.

But data that’s 14 days old or seven days old might not be right for a property spreadsheet. So you may want to figure out which accounts is that going to apply to pull those out and say this stuff up here is really good data. Really good values that we can rely on, and these other ones we want the court to be aware that this stuff fluctuates.

Carrie: Also having that conversation with your client. I need final numbers for trial. Stop moving stuff around. Don’t pay that off right now, unless you have to, or whatever the case may be. That kind of goes with what we were saying earlier.

Operating accounts can fluctuate a lot. Having that conversation with a client, don’t have lots of operating accounts. Trying to narrow those issues, so that way, the morning of trial, you just have one account that is different than it was a week ago. If you can pull that off.

Holly: I would also remember, when you’re at mediation, there are mediation fees. Have they already been paid? Are they still going to need to be paid? What about the attorney’s fees? You might have a bunch sitting in trust. You might have nothing sitting in trust. It kind of depends on how your firm operates in that regard. And so did the other side already pay for mediation, and you didn’t, and now you’re essentially paying half of their bill? And they are not paying half of yours. So you want to think about all those things before you start to negotiate.

Carrie: Not only what’s in your trust account, but what might be in the other side’s trust account, if you don’t know, because that’s an asset that I think gets overlooked sometimes.

Holly: All right, well, I think that pretty much brings us to the end of discussing inventories and appraisements for today. Thanks again for our listener who sent this suggestion. I hope it’s been helpful, and we’ll keep them coming.

Voiceover: The Texas Family Law Insiders podcast is sponsored by The Draper Law Firm. We help people navigate divorce and child custody cases and handle family law appellate matters. For more information, visit our website at www.draperfirm.com.