One of the things Florida couples undergoing a divorce must often negotiate is the alimony payment. Many people opt for a monthly payment, but this is not the only choice available to them. In some states, divorced couples can also opt for a lump sum payment, just as long as the lump sum is at least equal to the total amount the payee would have received in future monthly payments.
There are benefits in opting for a lump sum payment for both the person paying alimony and the person receiving it. The person paying alimony might choose a lump sum payment to avoid missing a payment later on or to move on with their life without the complication of a monthly reminder of their previous relationship.
The person receiving the payment might also benefit from a lump sum payment because in the long run, the money they receive now will probably be worth more over time, since there is the possibility of investing that money. Additionally, receiving a lump sum might mean that the person also avoids having to go through the process of collection to continue receiving payments, since it is common to go through a court proceeding to obtain a judgment ensuring that a former spouse will continue to pay. However, when receiving a lump sum, the payee needs to be aware of the effects of taxes. If the sum is identified as alimony, the entire sum might be taxed. However, if it is identified as a settlement, the amount of taxes owed might be significantly less.
Florida residents who are interested in opting for a lump sum alimony payment as part of their divorce might seek the guidance of a lawyer. A lawyer might better advise them on the options available for alimony payments and the state rules regulating alimony.
