Paying monthly alimony may become problematic for former spouses. In fact, some people do avoid monthly arrangements for their grants in fear of missing the payment date and the consequences that follow. Others choose lump sum payments to avoid the inconvenience of monthly grants and the reminders of a failed marriage.
If the court orders you to pay alimony, you can provide financial support in one go through lump sum arrangements. After all, this arrangement provides many benefits for both the payer and the recipient, including:
1. Getting More Money
If you choose a lump sum arrangement, you may receive more money than with monthly payment arrangements. Experienced divorce lawyers in Long Island explain the lump sum payment must be equivalent to the total amount of future payments. This will not be discounted to present day value. There may be tax consequences if you decide on a lump sum payment, though.
2. No More Collection Problem
If you arrange a lump sum payment, you do not need to think about discrepancies during collection. Most people often need court judgments requiring their former spouses to continue with the arrangement and pay their monthly alimony. If you go with a lump sum payment arrangement, you can avoid these enforcement issues.
To qualify for a lump sum payment agreement, you need to get the approval from both your former spouse and the court.
How to Make Lump Sum Payments
Instead of spreading out the cash amount over a certain period, you can pay off your entire alimony balance at once. Through this approach, you do not need to comply with monthly payments.
It is best to speak with your local divorce lawyer to determine if this arrangement is a good option for your situation. Your lawyer can explain the process and discuss the factors that determine the amount of alimony following your divorce.