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Might a lump-sum alimony payment be in your future?

If you are going through a divorce, the issue of alimony may be raised. Will you have to pay or will you be on the receiving end? While spousal support payments are determined by various factors, including but not limited to the incomes of both parties, there are also other points to consider.

For instance, if you have to pay alimony to your ex, you might dread the thought of writing that check or making that deposit every month. Especially if you are longing to make a clean break from the past, that monthly reminder is going to rankle.

Similarly, if you are the one receiving such payments, you might wish to dispense with receiving relatively paltry disbursements of money each month. Maybe you want to move half a world away and need the cash to do so, or perhaps you want to pay down your student loans and embark on your second act free and unencumbered.

If either scenario rings true, you and your ex may decide to agree on a lump-sum alimony payment. While this approach might not be a good fit for every divorcing couple, it can certainly benefit some. Considering that no one has a lease on life, taking one large payoff now can guarantee that you will have the money you need. What if your ex dies within only a few years? A dead man can't be hauled into court for delinquent payments.

This brings up another benefit of lump-sum alimony settlements -- they bypass any future haggling over late or incomplete installments of the monthly sum. You have it all at once, to invest, make a purchase, leave the country or pay off bills.

You should understand that lump sum alimony payments come with tax consequences in most circumstances. Therefore, it's important to work with your divorce attorney to make sure that it is structured in the most favorable way for you.

Source: Findlaw, "Avoid Alimony Monthly Payment Programs," accessed Sep. 09, 2016

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