Pros & Cons to Lump Sum Alimony Payments in Florida
If you and your spouse are in the middle of a divorce, you might both find yourselves in a position where you are wondering if it is best to give or receive a single payment of alimony or if it is best to make continuous payments. Of course, the answer is that it all depends on who is paying and who is receiving.
Below is a list of pros and cons from both perspectives regarding lump sum alimony payments:
Pros and Cons for the Spousal Support Payer
As the spousal support payer, one of the most obvious benefits of making a single payment is that you will no longer have any future obligations to make payments to your ex-spouse. Not only that, but a doing so also removes the possibility that your spouse will require you to maintain life insurance in order to safeguard alimony payments after your death.
However, the benefits of a one-time payment for the payer tend to stop there. While it might be nice to not have to make any more payments to your former spouse, the fact is that you might not have the resources to make this one-time payment. Additionally, a lump payment will not qualify you for an alimony deduction and, as a result, you might want to try to get the amount reduced to account for the fact that you will not be receiving a tax deduction. Your ex-spouse will likely disagree to this.
If you do not have the ability to make a one-time payment, you might be able to borrow, but the interest charges on this type of loan are typically non-deductible, which would increase the cost of the transaction.
Pros and Cons for the Spousal Support Recipient
Opting for one-time payment could be immensely beneficial if you do not trust your former spouse to faithfully make each monthly support payment. You would also have immediate access to these funds, which might allow you to purchase a home instead of having to rent, or pay off debts that might otherwise accumulate due to high-interest rates if you had to pay them over time.
If you are not skilled at managing your cash, receiving such a large sum of money could be incredibly risky and you might consume it faster than if you had received it in gradual monthly payments. In the event that your former spouse needs to declare bankruptcy, it is possible that his or her creditors might attempt to recover a portion of the lump sum under certain circumstances.
That said, no two situations are exactly alike, so in order to know for certain which option is most beneficial for you, it is critical to seek that advice of a skilled divorce attorney to protect your best interests.
Divorce Attorney in New Port Richey
Spousal support is often a hotly contested issue between spouses, whether you are trying to fight for alimony payments or trying to reduce them. At Dale L. Bernstein, Chartered Law Office, our skilled divorce attorney has over three decades of legal experience and is well-versed in Florida family law. Reach out to us to understand your rights and make informed decisions.
For the representation you need and deserve at this time, call our office today at (727) 312-1112 and schedule an appointment to get started on your case.