We discussed some of the points that are used to determine alimony last week. If alimony is part of your divorce case, there are some points you should consider if there is the option of the alimony being awarded as a monthly payment or a lump sum payment.
Why should I consider a lump sum payment?
When a lump sum payment is ordered, there is no promise of future payments. If you are the person paying alimony, this means you won’t have to worry about being able to make the payment in the future. If you are recipient, you won’t have to worry about whether the money will come in each month. Additionally, a lump sum payment likely means that you can avoid having to deal with your ex in the future.
Are there any downfalls to a lump sum payment?
Lump sum payments likely have some tax consequences that you should consider. Some of the tax consequences depend on how the lump sum payment is classified. Because the classification can have a big impact on how the payment is taxed, you should make sure that you look into that before agreeing to a lump sum payment.
Every aspect of an alimony award might affect how it is ultimately handled. It is important for you to explore all the available options, especially if you are going through mediation to come up with an agreement for your divorce settlement. By understanding all the points of alimony possibilities prior to mediation or the divorce hearing, you can decide how you want to handle your petition for spousal support.
Source: FindLaw, “Avoid Alimony Monthly Payment Programs,” accessed May. 15, 2015
