Not all divorces come with alimony payments, but if there is a chance that your divorce will, you should know that you don’t have to get stuck with monthly payments. In some cases, it is possible to use a lump sum payment to get the alimony taken care of all at once.
Lump sum alimony isn’t possible for everyone. You have to have the resources available to make the support payment. The payment should be the same as what it would have equaled if you had made all of the monthly payments. This can limit the suitability of this arrangement.
There are a few things to think about if you are going to use the lump sum method to get the alimony paid for. First, you have to find out how to classify it. This might be handled by the court. If it is labeled as an alimony payment, your ex will have to pay taxes on it. This might not be the case if the payment is labeled as a settlement.
The good news for you is that if you don’t have to make monthly payments, you aren’t at risk of missing a payment and having to deal with the implications of that. You also won’t have to deal with your ex regarding the payment. This is a huge bonus if you don’t have children since you can be completely done with your ex once the payment is made.
Ultimately, you have a lot of things to consider when you are going through a divorce. Spousal support is only one of these, so make sure that you look at the full big picture to make sure that you are making the decisions that are in your best interests.
Source: FindLaw, “Avoid Alimony Monthly Payment Programs,” accessed July 21, 2017
