At the end of a marriage, you and your spouse have the opportunity to decide on the details of the settlement. Of course, the two of you may have differing ideas on how to divide assets between the two of you and the amount of any support payments. Luckily, if the two of you can’t agree, the state of Texas has laws to guide divorces in the state, and a judge can help you settle your differences in court.
One area often covered during a divorce is the concept of alimony or spousal support. If one spouse did not work, or made a significantly lesser income, he or she may receive support payments in the immediate aftermath of the divorce until he or she can gain more financial stability. This is especially true when the marriage was long, or one spouse was disproportionately responsible for the household maintenance. A spouse who was a high-earner with many assets may expect to discuss alimony during divorce proceedings.
For some, making alimony payments is frustrating. It can be a reminder of a situation that they’d rather not think about, or it can be a source of anxiety and fear about missing payments. After a divorce, many people just want to move on with their lives.
Lump sum vs. monthly payout
Alimony can be paid in two forms. After the settlement, a judge may order one spouse to make regular monthly payments to his or her ex for a certain predetermined period. Another option is a one-time lump sum payout. This is a “one and done” approach to alimony, and if your spouse and the court agree, the lump sum is a good option for many people.
Benefits and considerations of a lump sum payout
The benefits to lump sum alimony payments are that the payment ends the required contact between the two parties, barring other circumstances such as child custody. After a spouse makes the payment, he or she does not need to worry about making monthly payments, being late or thinking about his or her ex. It is likely that receiving the money all at once will represent more spending power, as today’s dollars will probably have more buying power now than in the future.
Tax issues are a big consideration. When making a large payment, if it is classified as alimony instead of a settlement, there are tax implications. Both the payer and the payee will need to consider the tax implications regarding alimony before making a final decision.
Getting help with complicated decisions
A divorce comes with many decisions. Alimony concerns may require a person to consider his or her role in the family, the family finances and weighty tax concerns. Whether you will make spousal support a part of your divorce or not depends on your unique situation. Since every divorce is unique, and divorce decisions come with long-term effects to a person’s life, many individuals find respite by consulting with qualified individuals such as family law attorneys for help and support with a strategy to resolve these and other issues at the end of a marriage.