Monthly vs. Lump-Sum AlimonyBy Moskowitz Law Group, LLC |
Alimony, or spousal support, is an important factor in many divorce cases. Alimony is a monetary award a court may grant to one spouse in a divorce case to maintain that person’s lifestyle after the dissolution of their marriage. For example, if one spouse gave up their career to raise their kids, that spouse may be eligible for alimony payments from the higher-earning spouse after the divorce. Depending on the unique facts of a divorce case, a judge and the paying spouse will determine whether alimony payments will be paid as one lump sum or in monthly installments.
Paying an entire alimony award in one lump sum is not feasible for everyone, as it can be financially challenging to pay the full amount all at once. In these cases, monthly installments may be the better option. A seasoned lawyer can walk a divorcing spouse through the pros and cons of both alimony options and advise them on which may be the best choice given their individual circumstances.
Lump-Sum Spousal Support
One of the benefits of lump-sum alimony is avoiding a prolonged financial obligation to an ex-spouse. The paying spouse can make one payment and fulfill their financial obligation immediately to avoid drawn-out communications with their ex. Paying all at once also prevents the non-paying spouse from trying to increase monthly alimony payments if the payor’s income increases, the payee’s income decreases, or because of some other kind of change in circumstances.
A potential drawback of paying alimony in a lump sum is that it could backfire in the future if the payor loses his or her job. A spouse who paid the full alimony amount all at once will not be able to get any of this money back, even after a sudden loss of income.
For the party receiving the payment, a lump sum payment could be detrimental if they are not skilled in money management. Receiving the full alimony amount at once may tempt an individual to spend recklessly, and they may fail to save an appropriate amount for the future. Receiving lump-sum alimony could also make someone ineligible for certain tax breaks and financial aid. Conversely, receiving a lump-sum payment could be beneficial to a recipient who is facing significant, immediate expenses.
Monthly Alimony Payments
Many individuals prefer monthly alimony payments because the financial obligation is spread out over time, making it easier for paying spouses with lower income or other expenses to fulfill these payments. Monthly payments also allow for more flexibility. For example, if the paying party experiences a sudden and involuntary loss of income, or the receiving party becomes employed or begins earning more income, payments can be reduced accordingly or even eliminated altogether.
There are a number of factors that could play into a divorcing couple’s alimony agreement. An experienced attorney can advise an individual on which type of spousal support makes the most sense in their financial and personal circumstances.
Contact a Dedicated Attorney Today
In all aspects of divorce, representation from experienced lawyers is critical. At Moskowitz Law Group, we have extensive experience helping couples navigate the divorce process, including deciding the best alimony payment options. Reach out today to learn more about how a skilled attorney could assist you with your spousal support matters.