There may be an option to avoid monthly alimony payments
When a marriage was comprised of one primary income earner, then a divorce may leave one spouse wondering how he or she will make ends meet — especially if one has been out of the job market for an extended time. It is in these cases that a judge may order a former spouse to pay alimony for a period of time. Kentucky residents who have been ordered to either make or receive these payments may wonder if they have options for how those obligations are met.
In the majority of divorce settlements, the spouse who was the main support during the marriage may be ordered to pay the former partner a set amount of money every month for a stipulated period of time. In many situations, the individual making the payments may worry about the consequences of missing a payment or may resent the on-going monthly obligation. In some circumstances, it may be possible to set up a lump sum payment that will meet the total amount while freeing the payer from having to continue making this a regular part of his or her monthly expenses.
There are benefits for the recipient who accepts the option of a one-time payment. One of those benefits is the amount paid may be slightly more than would be received over time. Secondly, having a the option of a lump sum may provide the opportunity to invest it, thereby increasing the value of the payment. Lastly, the recipient will not have to go through the collection process if the former spouse misses one or more payments.
One disadvantage of choosing a one-time payment may be a tax obligation. As in a lottery payout, the recipient may owe taxes whenever a large sum is received in a calendar year. However, if the payment is described as a settlement, then any tax obligations may be greatly reduced. Whenever Kentucky residents are facing a divorce and have questions or concerns about alimony or any related matters, they may choose to seek the guidance of a family law professional who can guide them through the process.
Source: FindLaw, “Avoid Alimony Monthly Payment Programs“, Oct. 18, 2017