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The benefits of a lump sum alimony payment

Alimony is a divorce issue that comes up in many divorce negotiations when Tennessee couples are ending their marriages. If one spouse supported the other spouse financially during the marriage, the lower-earning spouse may need the financial support to continue for a period of time after the divorce. Alimony payments are usually paid on a monthly basis, but they can also be paid in a lump sum.

A lump sum alimony payment can be convenient for the payres if they can afford it. By paying alimony all at once, the payerwill not have to worry about getting into legal trouble later on for missing monthly alimony payments. The payer may also like to avoid monthly alimony payments so that they do not have a monthly reminder of their divorce for years to come.

The party who will be receiving alimony can also benefit from a lump sum alimony payment. By receiving the entire alimony balance in advance, the recipient will not lose value on future monthly payments due to inflation. The recipient may also decide to use the lump sum for investments that can increase the value even further. However, prospective lump sum recipients should know that they might be facing a big one-time tax bill, as alimony is considered income by the IRS.

A lump sum alimony payment is usually only approved by a family court judge if both spouses agree to it. Before deciding to agree on a lump sum alimony payment, people may want to speak to their attorneys about their options. An attorney may help a client to look at tax implications and other factors in order to determine the best way to structure alimony payments in a divorce settlement.

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Stanley A. Kweller, Attorney at Law
214 Second Avenue North, Suite 103
Nashville, TN 37201

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