The family law practice area has seen the
current economic climate lead to a huge increase in the number of modifications
for existing child support and alimony awards. People are losing jobs, losing
homes, taking pay cuts, losing bonuses and other compensation that was
previously used to determine such financial support awards. This can be an
especially big problem in cases where one party has received an alimony award
and relies on those monthly payments to meet their basic living expenses.
If someone retires, gets injured, loses
their job or is otherwise unable to make alimony payments, and your alimony is
not designated as “non-modifiable” you may very well receive a discounted
alimony payment on an ongoing basis or it may be eliminated all together. Even
if the alimony award is non-modifiable, if the person responsible for making
alimony payments loses a job and has no assets or means to pay, your chances of
being able to hold someone in contempt for non-payment of alimony are slim. Given
those potential concerns and the current state of our economy, those who are
entitled to any form of alimony really should consider the idea of “lump sum”
upfront payments so that they can avoid the issue of an alimony award being
terminated or reduced based upon unfortunate circumstances arising in the
future.
If there are assets, especially cash
assets, available during the initial divorce proceeding it makes sense to at
least consider how much of those assets could be distributed to you in a
settlement in exchange for a reduced alimony payment. No one knows what the
future holds and getting your money up front is a way to reduce potential risk
down the road. Lump sum alimony does come with the responsibility of being
smart with the money you get up front and making sure the lump sum lasts. This
requires you being savvy and meeting with a financial planner or other adviser
to manage your money properly.
While we’ve discussed the advantages to
the supported spouse, what are the advantages to the paying spouse? First, you will have no continuing obligations
to your former spouse, something many going through a divorce would welcome. Another
good thing about lump sum payments are that they should reflect a reduction to
account for the time-value of money. This means that the total paid would be
less given that it is upfront. Another, albeit smaller benefit, is that by paying
a lump sum you are then freed from the requirement of having to maintain life
insurance to safeguard the alimony in the event of your death.
Though it’s not right for everyone, the
old adage of a bird in hand being worth two in the bush can be true in the
context of divorce settlements. If you find yourself facing the prospect of
divorce, contact an experienced Ohio family law attorney who can help guide you through the
difficult process. Count on the expertise of Twinsburg family law attorney Carol
L. Gasper.
Source:
“Is
it better to give or receive one large lump-sum payment up-front or monthly
spousal-support payments?,” published at DivorceMag.com.
See
Our Related Blog Posts:
Treasury Department Decision May Leave
Those Behind on Child Support Penniless
No comments:
Post a Comment