Should I choose a lump sum alimony payment?
On behalf of Barli & Associates LLC posted in alimony on Thursday, February 1, 2018.
When you’re negotiating alimony in your divorce, if you’re the one who plans to pay alimony, you might cringe at the idea of needing to pay your ex-spouse any amount of money on a monthly basis. Nevertheless, if the law is on your ex’s side, you may not have a choice in the matter when it comes to the question of alimony. When it comes to the question of monthly payments, on the other hand, you might have some choice in the matter.
It’s due to the frustration of having to make monthly payments, and the fear that one’s financial condition could change or a payment could be missed, that many New Jersey alimony payers decide to negotiate a lump sum payment to satisfy their alimony obligations in one fell swoop.
In order to gain approval for a lump sum alimony payment, it’s likely that you will need to negotiate the terms with your ex-spouse. Once an agreement with your ex has been reached, you can submit the plans to the court for approval. With court approval of the agreement, you will then be able to proceed with the lump sum plan.
When determining the amount of a lump sum alimony payment, it’s important for New Jersey spouses to take the tax implications into account. After all, the full amount of the alimony payment will be taxable and the recipient will incur tax liabilities once the money is received. Also, paying a lump sum could represent a loss for the payer, since inflation will make a dollar today more valuable than it is 10 years in the future. Before agreeing to a lump sum alimony agreement, be sure to fully understand both the good points and the negative points of your negotiated settlement.
Source: Findlaw, “Avoid Alimony Monthly Payment Programs,” accessed Feb. 01, 2018