Tag Archive for: lump sum alimony

Alimony and Child Support: Lump-Sum vs. Monthly Payments 

,

Divorce, alimony, child support, and lump sums — many people struggle through the details and consequences of these systems as they pursue a legal separation or divorce. 

In many marriages, one spouse earns more than the other. The higher-earning spouse may have relied on the other spouse to hold a less time-consuming and lower-paying job and do more of the household tasks. Similarly, one spouse may have given up career growth to be a stay-at-home parent and save the family money on childcare costs. 

When these couples divorce, the higher-earning spouse is often responsible for some form of spousal support. This support can help the other party maintain their living standard while pursuing education and career growth.  

The amount and timeline of alimony payments depend on several factors, including the length of the marriage. In some cases, higher-earning spouses can be responsible for paying permanent alimony to their spouses. 

Child support is intended to financially support a child, not the adult. There are several types of alimony and child support payment plans. Whether you should advocate for lump-sum or monthly payments in your court case depends on specific considerations. 

Benefits of a Lump-Sum Payment 

Guaranteed Money 

A lump-sum payment could be a wise choice if your ex-spouse is unstable or has a history of money trouble. It can eliminate the monthly stress of not knowing if your ex-spouse will make the required payment.  

Protects You Against Your Spouse’s Future Financial Troubles 

With uncertain financial times, there is no guarantee your ex-spouse will be able to continue making the agreed-upon monthly payments. Their business may go under, or they may make bad investments. A lump-sum payment ensures you will not be affected even if your ex comes into major financial trouble. 

Support Your Future 

Perhaps you have a major financial goal. Maybe you want to open your own business, buy a house, or go back to school. A lump-sum settlement can help you make that investment stress-free without waiting to receive alimony payments. 

Benefits of Monthly Payments 

Most of the benefits of lump sums are best suited to couples negotiating alimony. Many attorneys do not recommend a lump-sum payment for child support payments and instead recommend monthly payments. 

Best Interest of a Child 

Child support is designed to support a child’s basic life necessities, like food, housing, and education. Because these necessities remain constant throughout a child’s life, monthly payments tend to make the most sense to support a child’s best interests. 

If you have concerns about your ex-spouse’s ability to commit to monthly child support payments, an attorney can help discuss your options and rights. 

Contact an Experienced Attorney 

Divorce cases are challenging enough emotionally. Adding in the stress of negotiating spousal support and child support payments can feel very overwhelming for many people. An experienced legal team, like the lawyers at Karen Ann Ulmer, P.C., can help you answer any questions you have about divorce, alimony, child support, and lump sums.

by

Lump Sum Alimony

Alimony is support paid to an ex-spouse following the divorce decree. The amount of alimony is largely based on the incomes of the parties but may also be affected by the distribution of the other assets, if any. Unless otherwise stated by agreement, alimony may be subsequently modified due the changed circumstances of either party. The changes must be substantial and of a continuing nature. As previously alluded to, an alimony provision within an agreement between the parties may not be modified in the absence of a specific provision allowing such a modification within the agreement. Generally, the length of alimony is directly attributable to the length of the marriage. For example, a party may expect approximately 1 year of alimony for every 3 years married. For marriages of over 25 years, an indefinite term of alimony may be appropriate.

The court can only Order alimony in the traditional vein of a monthly support award. This monthly support award is tax deductible for the party paying alimony. It is also taxable income for the party receiving it. Parties who are seeking to negotiate a settlement agreement can weigh the pros and cons on a lump sum alimony award as opposed to a month-to-month obligation. A potential con is a change of circumstance down the road where the support may have increased, decreased or been terminated altogether. A benefit would be getting it over with right away as well as the discount for present cash value. The payor must have the resources to afford a lump sum payment as well whether that been separate assets or through sacrificing some of their portion of the marital estate. You should consult with your attorney and accountant on whether a lump sum alimony award or a traditional alimony award would work best for you.

Click here to read more about alimony.

by