From the monthly archives:

May 2009

Collaborative Law . . . A better way – Intro

by Duane L. Coker on May 5, 2009

This is a three part post on what is quickly becoming the preferred way to handle divorce and family law matters — Collaborative Law.

Collaborative Law Divorce has been gaining popularity in Denton County and many legal, financial, and mental health professionals are working hard to better their skills at handling family law cases collaboratively.

In short, Collaborative Law offers spouses and parents the opportunity to agree to take their case out of the traditional litigation model that has been used for years, to gain control over the outcome of their divorce or family law matter, and to resolve their differences with dignity and privacy often lost in the traditional approach to family law litigation.

At Duane L. Coker & Associates, P.C. all of our attorneys are collaboratively trained.

We are frequently asked questions about Collaborative Divorce and recommend a number of books to our clients. While the second two parts of this post will explain Collaborative Law more in depth, if you can’t wait to learn more, I recommend the following:

Check back soon for Part 1 and Part 2 of this post. In Part 1, I will give a general overview of the Collaborative Process as it often plays out in a Divorce case here in Denton County. In Part 2, I will attempt to answer many of the questions I often hear about Collaborative Law.

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Managing Savings in a Turbulent Economy

by Steve Walker on May 4, 2009

[Editors note: This article was originally published by Steve in February of this year. However, with continued market fluctuations, it is still relevant and focuses on a concern many facing divorce in Texas deal with daily as they work to preserve wealth and consider the division of their community property marital estate]


Our economy continues to shock and surprise, causing growing concern for investors, particularly those with their eye on retirement. A recent article by William Reichenstein in The American Association of Individual Investors Journal titled “Will Your Savings Last? What the Withdrawal Rate Studies Show” provides insight into what can be done to weather this economic storm. This article reviews two studies that seem to suggest a definitive safe withdrawal rate is possible to help minimize risk while maximizing the benefit to the investor.


First, the article points out that determining the withdrawal rate is a balancing act. If withdrawals begin with an initial rate that is too large, the investor will have an unacceptable large shortfall risk, which is defined as the probability of running out of money within the investor’s lifetime. However, if the withdrawals are too little, the investor’s lifestyle will be below his or her means. Based on the two studies evaluated in this article, the “Rule of Thumb” is as follows:


Assuming an asset allocation of at least 50% stocks, a retiree who withdraws 4% of the portfolio in the initial year and an inflation-adjusted equivalent amount each year thereafter has about a 90% to 95% probability that the portfolio will last 30 years.


As with any Rule of Thumb, this, while a useful thought, is grossly understated. Several factors can influence the shortfall risk. The first factor considered in this particular article is the sequence of returns; a portfolio will last much longer if returns are strong in the early years and poor in the later years than vice versa. Also, a portfolio’s asset allocation between stocks and bonds can vastly impact the longevity of the income stream. Finally, another major factor, as is always the case with “Uncle Sam”, is taxes. It is important to consider whether funds have been held in tax-deferred accounts such as 401(k) or if the funds are in a taxable account, where interest, dividends and realized capital gains are taxed each year.


Perhaps most notable, these studies implicitly assume that future gross stock and bond real returns will mimic- or at least be similar – to historical gross returns. Conversely, recent economic reports seem to imply that we are facing unchartered territory. In short, while using the 4% Rule of Thumb as a guideline, be prepared to adjust future withdrawals as necessary to accommodate to the economic fluctuations.

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