by Dave McClure
As the Baby Boomers age, every accounting firm will, by necessity, be carried into some level of pension, retirement and estate planning.
This means that every accounting office will need software appropriate to these tasks. And, as accounting firms cast about for the right tools for their specific clientele, a conflict emerges between the full product suites and the stand-alone calculators for the most efficient way to create the necessary plans and presentations.
On the suite side, market leaders such as NaviPlan, Money Tree and Profiles+ have garnered large followings and increased profits for accounting firms by offering the most common tools at reasonable prices. At the same time, highly specialized stand-alone products offer high economy, speed and precision in small packages, though generally with less impressive interfaces and navigation.
The majority of accounting firms — even the small ones — will find a need for both one or more of the suites and a hatful of the specialized products. While the software forges that create specialized products are too numerous to mention, and their product catalogues too large to present in a single article, this roundup focuses on a good representation of each major vendor and one of its most valued products.
Included in this roundup are three major suites with strong retirement and estate tools, and four of the special-tools software forges.
DTS-IRA/Pension Distribution Planner v. 2002.10
Denver Tax Software Inc.
The DTS IRA/Pension Distribution Planner is a specialized tool designed to assist in cases where the client has to remove money from an IRA either before age 59-1/2 or after 70-1/2. In either of these cases, the assistance of an accountant will be critical due to the potential penalties involved.
The program is designed to calculate the maximum distribution for clients under 59-1/2, who need their funds but also wish to avoid the 10 percent early distribution penalty. This penalty is often understated or treated as an absolute by banks and financial institutions, and can result in a substantial loss to the client. Likewise, the program handles clients over 70-1/2 who need to withdraw the required minimum distribution amount by December 31 to avoid a 50 percent penalty.
The software is simple and straightforward. The opening screen displays file, view, inputs, options and help, presented both as icons and drop-down menus. Of these, the two that are of greatest interest are the inputs and the views.
The inputs icon brings up two data entry sections, one for information about the IRA owner and the other for the IRA and its details. The IRA tab includes the means to list a spouse as beneficiary or a non-spouse beneficiary. The balance in the account, first-year minimum distribution, amounts distributed already this year and rate of return round out this page.
The views icon is used to select the Display Reports function, which covers reports on the input data, general information, distribution calculation, calendar year summary and projection of distributions.
The DTS IRA Distribution Planner is one of 17 specialized accounting tools from Denver Tax Software, and boasts 1,400 accounting firms as customers. Though neither the interface nor the output are particularly elegant, both serve their purposes of helping clients determine the optimal distributions while avoiding unnecessary penalties.
Estate Plan Plus/Visual Estate Plus
Selden Integrated Systems
Estate Plan Plus and Visual Estate Plus from Selden Integrated Systems are a pair of planning and presentation tools built on a 32-bit Windows engine for speed, reliability and impressive appearance.
Estate Plan Plus is a comprehensive program that includes over 45 drill-down reports showing how calculations are performed. Estate Plan Plus offers GRATs, GRUTs, GRITs, life insurance trusts and gifting, as well as QPRT calculations, charitable lead and remainder trust analysis, and family limited partnerships.
Key features of the software are its ability to quickly generate up to 10 what-if scenarios, presenting them side by side for quick comparisons; standard reports that include estate disposition reports, tax detail reports, tax calculation reports, family business reports, special use reports, liquidity reports, GST reports and more; a live updating service that keeps the software in synch with the latest estate planning and implementation laws; support for all states; and the ability to separate assets or group them according to type of asset.
Included with Estate Plan Plus is an estate planning presentation and overview software tool, Visual Estate Plus, whose goal is not planning software per se, but rather to help convince clients of the importance of estate planning through well-prepared presentations in the areas of changes of ownership, lifetime gift programs, charitable remainder trusts, family limited partnerships, life insurance trusts, and marital and charitable deductions. Its numerous reports, plan comparisons and straightforward graphics provide a way to demonstrate expected growth rates, planned future contributions and withdrawals, and other critical estate planning calculations.
Other products from Selden Integrated Systems may be used to round out the estate toolkit. These include the 706 Plus Program, an interactive program that works like the IRS form for estate tax filings; 709 Plus, which also uses the IRS format for gift tax filings; and Probate Plus, the fiduciary accounting program for estates and trusts.
Estate planning and presentation software from Selden provides important resources that cover a number of essential practice areas as stand-alone products integrated through a single navigational interface. Its sleek appearance, easy navigation and concise presentation make this software essential for any size accounting practice.
Money Tree Suite 2003
Money Tree Software
Money Tree’s superlative financial planning software suite provides a concise focus on retirement planning through its Easy Money, Golden Years and Retirement Solutions modules. These programs provide the specialized tools needed to handle retirement and estate planning functions as either stand-alone products or as integrated parts of the suite.
The current version is 2.46.12, which includes the 2004 tax tables as well as the 2003 tax act. The complete Money Suite also includes the Money Tools administration and customer relationship management functions.
Easy Money is a comprehensive, goals-based retirement planning tool that does estate planning, asset allocation, retirement planning and basic cash flow analysis. Up to 100 report pages can be generated to track client investments, retirement, net worth, education funding, asset allocation, income taxes and more. Easy Money includes Monte Carlo Simulation reports, the new RMD calculations, and an audit trail that leads from each summary page to the supporting detail pages.
DTS-IRA/Pension Distribution Planner
Estate Plan Plus/ Visual Estate Plus
Golden Years is a very detailed and flexible retirement projection program that tracks assets, income, expenses and taxes every year for up to 52 years. It is best suited for clients who are retired or nearly so, but may be used for clients in the accumulation phase. A popular feature is the comprehensive tax calculation capability that uses IRS rate tables, annual indexed breakpoints, and phase-outs of deductions. Another unique feature is the audit trail, which allows quick verification of all calculations. Golden Years includes Monte Carlo Simulation reports and the new RMD calculations.Retirement Solutions includes 10 retirement planning modules that give the user the ability to enter data and then print or display any or all of the presentation-quality report and graph pages contained within each module. Modules include Required Minimum Distribution, 72(t) Pre-59.5 Distributions, Lump Sum Distribution, Retirement Capital Projection with Monte Carlo Simulation Report, Pension Dimensions, Elderly Tax Planner, Break-Even Analysis, Retirement Plan Exchange, Qualified Retirement Plans, Cost of Waiting or Delay and Capital Accumulation.
Later this year, an updated version of Money Tree Suite, rewritten from the ground up using the Microsoft .Net framework, will offer even easier data input, better modeling of future changes, enhanced entry of investment and retirement plans, and the ability to access, update and run the programs over the Internet.
Money Tree Suite 2003 offers a streamlined set of applications that utilize a common database of information and assumptions, reducing the chore of data entry and minimizing the learning curve. Covering the most common scenarios that clients may present, the suite also provides excellent back-office integration with e-mail, calendaring and tasks that are invaluable to smaller accounting firms.
Emerging Information Systems Inc.
EISI has created a retirement and estate planning capability in a toolkit that stretches from standard planning to advanced scenarios and even to an online resource for smaller firms, all within the NaviPlan brand and updated for 2004.
NaviPlan Standard is a goal-based planning tool aimed at the individual professional or occasional planner who needs a quick system to assess progress toward retirement, education and major purchase goals in order to determine whether existing savings plans can meet those goals. It also provides the basics of life, disability and long-term care insurance, asset allocation, and estate planning analysis. A specialized tool, NaviPlan Standard Quick, offers a quick start to cover planning fundamentals.
NaviPlan Extended is a more detailed cash flow tool with a sophisticated tax engine. It extends the capabilities of NaviPlan Standard to provide a more comprehensive treatment of incomes, expenses, assets and liabilities, stock options and taxes. Aimed at the upper 20 percent of professionals, this is an excellent package for practices that need more extensive tools and capabilities — particularly for practices focusing on wealth management in retirement rather than the creation of simple plans.
NaviPlan Extended rates as both flexible and comprehensive for planning tasks, using bracketed federal and state income tax rates, advanced estate planning capabilities, powerful stock option modeling and detailed tax treatments that incorporate ATM calculations. Business planning functionality enables a thorough analysis of closely held C corporations and other entities (S corps, LLCs and partnerships) on the client’s personal holdings.
Significant changes have been made to both the Standard and Extended products in 2004, including a complete overhaul of the estate planning module, including the estate planning flow chart and the estate planning reports. In addition, the programs now have support for non-traditional couples in the areas of tax filing and dependent relationships.
EISI set out to become the benchmark standard in financial planning, and has largely accomplished that goal by expanding the scope and simplicity of its integrated planning products. A healthy estate planning capability is part of that scope, and that is what makes this program essential for the accounting firm that is dedicated to both financial planning and estate planning.
Pension and Roth IRA Analyzer
Brentmark Software has been providing services to professionals since 1986. Their services include: estate, financial and retirement planning software; informational Web sites (RothIRA.com, LifetimeSavingsAccount.com, NewRMD.com, Roth401k.com, PensionPlanners.com and StateDeathTax.com); online calculators (CalcTools.com); and online publications (GoldbergReports.com).
Its products for estate and retirement planning include Pension & Roth IRA Analyzer, RetireNow, Kugler Estate Analyzer, Estate Planning Tools,
Estate Planning QuickView, Retirement Income Navigator, Charitable Financial Planner, Pension Distributions Planner, Pension Distributions Calculator and Minimum Distributions Calculator. Each is designed as a stand-alone tool for fast, reliable analysis and presentation, and the Pension and Roth IRA Analyzer is no exception.
Sporting a simple interface and simple navigation, the Analyzer calculates required minimum distributions for traditional IRAs, Roth IRAs and pension plans — including the annual, semiannual, quarterly or monthly distributions to avoid penalties prior to age 59-1/2. It handles spousal, non-spousal and no beneficiary cases, as well as the three IRS-approved methods of calculating the distributions under current and previous IRS rulings. The Pension and Roth IRA Analyzer includes all of the features of Brentmark’s Minimum Distributions Calculator, Pension Distributions Calculator and Pension Distributions Planner.
In addition to distribution planning, the Analyzer provides for retirement planning; estate planning and estate tax planning; income tax planning using a calculated AGI with brackets scaled for inflation; insurance analysis; Roth IRA analysis; and modeling capabilities. A report generator provides for customized reports with 3D stacked bar charts that display up to four scenarios at a time.
The report can be saved as a Microsoft Word file for further customization, or as an HTML, text or spreadsheet file. Economically priced, Brentmark Software nonetheless offers a powerful set of tools that handle both single and multiple tasks with a minimum of fuss and enough calculation power to meet the needs of most accounting firms.
Profiles+ Professional v. 7.2
Financial Profiles Inc.
Profiles+ Professional is an integrated software application for financial planning, estate planning and wealth management that offers 14 modules, seven of which are directly related to estate and retirement planning.
Version 7.2, introduced in April 2004, strengthens both the focus and presentation of estate planning modules by helping to better explain the concepts and definitions that stand behind the detail. The upgrade provides advisors with resources to serve clients at both elementary and advanced levels of expertise.
The estate planning presentation pages show summary input data and calculated values as well as graphical illustrations. A set of audit pages verifies input data and provides detailed calculations for all numbers in the corresponding presentation. Other audit pages illustrate a year-by-year cash flow model, where appropriate.
The Profiles+ Professional package of 14 modules — four for business planning and 10 for personal planning — were created in order to help professionals sell more financial products, enhance their revenues and increase referrals.
These modules may be used independently or in combination, with preset combinations for personal financial previews addressing financial statements, income tax, estate planning, long-term care, financial independence, disability, survivor needs, accumulation, education and asset allocation, and for the four business areas of key employee evaluation, business valuation and continuation, employee benefit analysis, and financial statements and ratios.
The core estate planning module includes tools to educate clients about estate planning options, as well as to model and illustrate options specific to their financial situation. These tools create high-impact graphics built into an impressive set of reports. But the impetus to use the full suite of products will be strong for accounting firms with a robust estate and retirement clientele due to its ability to integrate such issues as survivor benefits, long-term care and calculations for financial independence.
Profiles+ Professional has taken a bold step forward in tackling the issue of client comprehension. While other packages rely on the communication skills of the accountant to convey precise and often complicated information, the estate modules of Profiles+ Professional have been enhanced as a first step toward meeting the increasingly sophisticated needs of retiring clients. As a counterpoint to single-issue calculators, it deserves a strong look by any accounting office looking to build its client base and revenues in the estate planning market.
Split-Up v. 6.05
Family Law Software
The best-laid plans can go astray — even retirement and estate plans. When the plans go astray due to divorce, the accounting and re-planning can be enormous, and there just aren’t a lot of tools available to help sort the mess out — except for Split-Up Professional.
According to the U.S. Census Bureau, more than 40 percent of Baby Boomers aged 40 to 50 have already been divorced at least once, and close to half are expected to divorce at some point in their lives. This means that divorce will be a significant planning factor during those years. That’s where Split-Up comes in. There are four products for financial professionals: Split-Up Professional Edition, Professional Pension Evaluator, Professional Deluxe Edition and Office Pack.
Split-Up Professional Edition is a suite of five products that includes the core Financial Advisor Professional Edition program; five quick divorce calculators; child support guideline calculators for California, Florida, New York, Massachusetts, Rhode Island, Connecticut, Georgia and Pennsylvania; an arrears calculator to assess child support payments in arrears; and a pension evaluator.
Though all will be of interest to accountants, the Professional Pension Evaluator is essential to help estimate the value of benefits of interest to judges and attorneys, to help the client understand the impact of changes in retirement dates or income levels, and to assist in deciding between lump-sum or distributed payments.
The evaluator calculates value using both so-called GATT (unisex) and PBGC (gender-specific) tables, both from the GAM-83, GAR-94 and RP-2000 mortality tables. It allows entry of any discount rate, and suggests the Federal Reserve Web site, where appropriate discount rates are updated regularly. It offers options to estimate the benefit if the employee continues to work until the cut-off date, or the earliest retirement date, or the regular retirement date. And the program includes a detailed audit report explaining line by line how the value is calculated.
The Split-Up software features one of the best and most attractive user interfaces available in financial planning software. Left-side, context-sensitive tabs make for easy navigation, and data entry is both streamlined and simplified. The charts and reports present a professional appearance with a respectable audit trail and drill-down capability.
Reasonably priced and easy to navigate, Split-Up allows people who are experiencing a divorce to make key life decisions relating to property division and to strategically assess the impact of the divorce on retirement plans, pensions and estates. It is must-have software for any accounting firm whose clients are facing a divorce.
Dave McClure is the president of Kent Associates, in Alexandria, Va., an independent testing labratory and evaluation service.
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