Monthly alimony payment programs may be good for one person in a divorce while hindering the other. They can be frustrating, and they may make it difficult to put your past behind you. If you want to avoid monthly payments, there are some other solutions you can consider.
Your attorney can help walk you through various options for paying alimony or creating a settlement where you don’t have to cover alimony. For instance, shifting some assets to cover the value of alimony might be an option.
Another thing to think about is a lump-sum settlement. This is, in essence, paying the other person all at once in order to settle the debt of alimony and to prevent yourself from having to pay alimony each month over time. Lump sum payments generally have to be paid in full for the total amount of alimony; you won’t get a break for paying up front in most cases.
What is the benefit of a lump-sum payment? For one thing, you don’t have to worry about missing payments. You can walk away from your divorce without needing further interactions involving alimony or payments to the other person, with the exception of child support if you have children.
Taxes can also be altered with lump-sum payments. You can write this payment off on your taxes, which will bolster your return for this financial year. The other party, on the other hand, will end up paying taxes on this settlement in most cases. You can work with your attorney to determine if this settlement would benefit you more or if paying over time is a better option.
Source: FindLaw, “Avoid Alimony Monthly Payment Programs,” accessed July 21, 2016