Divorces and separations can become complicated and ugly, especially in terms of money and the division of assets. When two spouses have a significant wage gap, the higher earner typically has to pay the other spouse alimony. One question spouses required to pay often ask is whether they can pay alimony in a lump sum. Read this blog and reach out to a York County, PA alimony attorney to learn more.
What is Alimony?
Alimony is financial support that a court orders one spouse to pay the other. Alimony may be required for various reasons. For example, if one spouse dedicated twenty years to being a homemaker and is now being divorced, they will probably be paid alimony by their ex-spouse. That twenty years, while probably necessary for their family, puts them at a disadvantage now that they have to support themselves because they will be undervalued in the job market. Alimony ensures that they can continue to live the lifestyle they are accustomed to.
What Types of Spousal Support Are There?
Spousal support is intended to give each spouse the most fair outcome in the event of a divorce. There are multiple types of spousal support:
- Temporary
- Could be ordered as part of a legal separation
- Rehabilitative
- Paid until your ex-spouse can support themself or gets remarried
- Permanent
- May be ordered if you were the primary earner throughout the marriage
- Reimbursement
- May be ordered if one spouse worked to help put the other spouse through school to increase their income
The amount of alimony, if any, is dependent upon the couple. A multitude of factors are relevant in Pennsylvania courts when determining alimony, including the income of each spouse, age and health of each spouse, duration of the marriage, lifestyle, children, infidelity or abuse, and more.
Is It Better to Pay Alimony in a Lump Sum or Monthly Payments?
This answer will depend on your specific situation. You may be able to combine any potential future payments into one lump sum that you pay your ex-spouse. You, your ex, and the court will have to come to an agreement on the lump sum.
Benefits of deciding on a lump sum instead of monthly payments include:
- No chance of forgetting or missing any payments
- The receiver may end up with more money than if they had accepted monthly payments over a number of years
- You will avoid any issues that may arise and cause alimony payments to be altered, such as changes in income.
In the past, the spouse who paid alimony was able to deduct the amount from their taxable income, and the spouse receiving alimony had to pay income tax on the payments. In recent years that law was changed. Now, any person making spousal support payments cannot deduct the payments from their income, and the person receiving the support is not required to pay taxes on the money. Contact a family law attorney to find out which alimony option is in your best interest.
