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Should alimony be in regular payments or a lump sum?

On Behalf of | Jun 19, 2020 | Divorce |

In the past, alimony was a common part of any divorce. The idea was that women had few opportunities for jobs that paid well, and therefore they needed an ex-husband’s support to avoid poverty after a divorce. A lot has changed since then, but alimony is still a part of many divorce settlements, when the circumstances demand it.

Under Michigan law, alimony is known as spousal support. Before deciding to order spousal support, courts consider a long list of factors, including the needs of each party, their ability to work, the duration of the marriage and more. In some cases, the parties themselves may have decided in advance through a prenuptial or post-nuptial agreement that spousal support should be a part of any divorce settlement.

Once it is decided that spousal support will be necessary, the next question is how and when to pay it. In some cases, support comes in the form of payments made every month, or once a year. It is also possible to pay spousal support in one lump sum.

Packaging spousal support as a lump sum offers a number of advantages for both the party who pays and the party who receives it. However, the lump sum can also trigger tax consequences, and perhaps needless to say, many people going through a divorce do not have the liquid assets necessary to pay spousal support as a lump sum.

When considering spousal support as part of your divorce settlement — whether you are going to be paying or receiving — it is important to speak to an experienced lawyer about your options. Weigh the advantages and disadvantages of regular payments and a lump sum payment, and be sure you have a good idea of which method will work better for you.