What is a statement of net worth?

Here’s a great article about what a statement of net worth is, by Steve Raiser, a Los Angeles personal injury attorney.

A Statement of Net Worth (SNW) reflects an individual’s financial health at a moment in time. The formula used to reflect a positive or negative “health” is simple: Assets – Liabilities = Net Worth. When assets exceed liabilities you have a positive net worth. Vice versa, when there are more liabilities than assets, you have a negative net worth. In general, a positive net worth is seen as the goal. Financial advisors, accountants, and individuals see a SNW as a scorecard that should change and improve over an individual’s or company’s life. As an individual, preparing an annual statement like this serves as a scorecard, of sorts, that lets you know if you’re making progress towards financial goals.

Uses of a Statement of Net Worth

There are concrete uses for a SNW besides using one to determine how your progress is going. Here are a few of them.

* Planning – If you look at life as a football game, a SNW allows one to see where adjustments need to be made along the way. If your favorite college team reaches the end of the third quarter on the short end of a 28-10 score, the coach knows that if he plans to win the game his team needs to put more points on the board. Simplistic? Maybe. That doesn’t make it any less valuable. He needs more assets and so do you. This statement can show if you have too few liquid assets or that your investments are overloaded in one industry or area.

* Satisfy Lenders – A lender will likely ask you to fill out a SNW at some point along the way in the lending process. Whether it’s for a car, house, or college loan, this statement is part of the process used to decide whether or not loaning money to you is a good idea. A negative statement and too little income is a red flag.

* High-Risk Investing – An investment broker or financial advisor might want to see a SNW before allowing you to put money into certain high-risk opportunities. It’s bad policy to over-leverage yourself to the extent than a single, violent downtown by a finicky market could throw you into financial chaos or even bankruptcy.

* Divorces: Highly valuable in the divorce process, your lawyer will have you fill out a SNW in the early stages of the proceedings. Child support and alimony rely largely on the results of this statement.

Assets

As you may have gleaned from the discussion thus far, one of the major categories involved in calculating net worth is assets. While not a complex task, there are several subcategories involved in this tally, some of which you might overlook without a checklist.

* Liquid Assets: This includes cash or anything that can be easily converted to cash like CDs, money market funds, short-term treasury notes, debts owed you under written contract, and life insurance policies.

* Personal Use Assets: Belongings that might fall into this category include household goods, sporting or hunting equipment, collectibles, cars and motorcycles, etc. The connecting thread is that these possessions could be sold for cash without much trouble.

* Long-Term Assets: This category includes those assets (investments) that you expect to hold at least one year, often much longer. Think stocks, bonds, real estate, business equity, commodities, or retirement plans. These types of assets are not always quickly converted to cash but do hold a definite – sometimes significant – value in your portfolio.

Liabilities

Serving as the yin to the yang that constitutes assets, liabilities are broken down into the two main subcategories listed below.

* Current Liabilities: Defined as bills or debts that come due within 30 days. This category is meant to reflect ongoing monthly expenses like rent and utilities, credit cards, taxes, and the current portion of long-term debt (the monthly amount due on a long-term loan).

* Long-Term Liabilities: Any liability that you pay back over a long period of time (in this case more than 30 days) goes into this category. This normally includes any part of a loan that falls outside the “current” definition.

The work involved in collecting information on all your assets and liabilities isn’t always reflected on the SNW, which is often a one-page compilation of your research. Generally assets are categorized on the left, liabilities on the right, and the verdict (positive or negative net worth) on the bottom right. If you’ve never created a personal SNW, make it a habit going forward. If life is a game, which it often feels like, there’s no better way to keep score than adding up your finances.

How do criminal lawyers charge?

This article is by Steve Raiser, a NYC and Los Angeles criminal attorney. People don’t really want to pay for a criminal lawyer. Many often decide to go with a public defender, since it’s cheaper. Typically attorneys set their own fees, and can charge anything they feel is compensatory to their skill and experience.

The complexity of your case is something that will influence how much the attorney charges. If the case is hard, or if it’s a felony vs a misdemeanor, then the attorney will charge more. Felonies have greater penalties, which means the stakes are higher – and the attorney has to spend more time. Another factor is the attorneys experience. Less experienced attorneys ask for less money than experienced attorneys. Another important factor is geography. The cost of living in NYC and Los Angeles is much higher than Kansas. Needless to say, as a result – criminal lawyers will charge more for their time.

As a result of things like this, there is no such thing as a standard fee when it comes to what an attorney might charge. In a survey done by Consumer Reports, the median fee charged by criminal attorneys was $1,500. Example fees can range and vary. For example, a defendant charged with a misdemeanor that goes to trial should expect a fee in the area of $2-3k. An attorney who is handling a felony may charge fees upwards of $10,000. Many attorneys will ask for either an upfront fee, or the entire amount upfront.

One of the things we often see as a problem – is when attorneys charge super low rates. Most competent attorneys will charge around the same amount as other attorneys. Low hourly rates can be misleading. Experienced attorneys will want a high rate in order to get adequate compensation to the amount of time they are spending on your case.

Hourly Billing is one of the most popular methods of billing. In this case, a defendant will pay an hourly fee for the time a lawyer devotes. Average hourly rates are anywhere from $150 to $350 per hour. This does not include other fees the lawyer incurs, such as copying fees, subpoena fees, and more. This is something which can be advantageous, or not, depending on the complexity of your case. If you have a tough case, then you could see your bills skyrocket. If you have a simple case which doesn’t take too much time, this can be a quick way of paying and settling a case. Hourly fees give attorneys more incentive to devote more time to your case. Typically, even if an attorney charges an hourly rate — the attorney will set a minimum retainer fee.

Case billing is another method of billing. Lawyers may charge a fixed fee. This means the cost to the client is locked. It also means, regardless of how many hours a lawyer works – the clients cost doesn’t go up. Case billing has it’s advantages and disadvantages. Defendants know their total costs – and it means the attorney has to take the risk if there’s an unforeseen complication. It can be disadvantagenous to a client, if the attorney handles the case quickly and doesn’t do enough work to make the client think he earned his retainer. In most cases, the fee may only cover a certain portion of the case. Typically, the fee only covers pretrial phases of the case. The attorney may require an additional fee to handle the trial.

Contingency fee is another type of financial method of paying lawyers. Typically, contingency fee is not possible in criminal cases. Contingency fee arrangements are only possible where there is money being awarded as damages. If the client is eligible for collecting damages, then the lawyer can ask for a % of that. Defendants in criminal cases don’t recover financial damages if they win – which means it’s not possible to collect money. As a result, for criminal cases – contingency fee’s aren’t possible.

Benefits of Personal Injury Lawyers

There are many classifications for personal injuries, depending on how serious the injury is. Not all injuries warrant the need for legal representation. Severe injuries, however, should not be handled without a personal injury lawyer, but how do you know that hiring one will benefit you?

Understanding of Laws

One of the most important benefits a NYC personal injury lawyer can provide you is knowledge of the specific laws governing personal injuries. Different lawyers handle different cases because that is the area they specialize in. For example, a divorce lawyer may not know as much about injury and insurance laws and probably would not be able to represent you as well. The same is true for the state you live in. Since laws vary from one state to another, an injury lawyer is usually most experienced with how to apply local laws to your case.

The Art of Legal Negligence

Knowledge with specific laws coincides with being able to properly negotiate for compensation that is fair. Negotiating can occur in a courtroom or outside a courtroom. A personal injury lawyer knows when to take a case to court, but also what would be a fair amount in a settlement. Without an injury lawyer, you might not get a fair settlement on your own, including compensation for potential future losses.

Proper Representation

The average person does not have adequate knowledge of courtroom procedures. If your case goes to court, do you have the knowledge to provide properly formatted legal documents? Can you draft subpoenas for witnesses and evidence to prove your claim? A judge will want more than just your personal account of what happened. By hiring a personal injury lawyer, you are properly represented in court, which includes the knowledge of handling court cases. Additionally, having legal representation tends to increase the overall value of your case.

Costs

Unlike other types of lawyers, you typically do not have retainers and other fees to pay up front. A personal injury lawyer, in most instances, will represent you from start to finish, whether the case goes to court or settles our of court, without a dime coming out of your pocket. Many of these lawyers do not get payment until you do. Once you have finalized a settlement, the lawyer’s costs come out and you get the remaining amount. These lawyers also do not charge you if the case is lost.

Whether it is a dog attack, car accident, or negligence injury, it is not smart to handle it on your own. If you do not know whether you have a case, call a personal injury lawyer for a consultation. You could suffer more by trying to represent yourself. Do not just take whatever you can get. Let a lawyer help you get what you deserve.

About Our Firm

Raiser & Kenniff, PC, is a premier New York law firm. We have a number of divisions, including matrimony and divorce, personal injury, criminal defense, and others.