Once a divorce is final, both parties are free to continue with their separate lives, and in many cases, this is precisely for what they wish. However, monthly spousal support payments may act as a regular reminder of a marriage that did not work out. Monthly payments also come with the risk that a payment may be missed, resulting in unpleasant consequences.
Fortunately, there is another option to consider when getting a divorce in New Jersey–a lump sum payment. This means that the complete amount is paid out at once. The lump sum paid out should equal the sum of the monthly payments that would have been made. Lump sum payments are allowed if both the spouse receiving the payments and the court agree to the arrangement.
While making a lump sum payment holds certain benefits for the payee, it also holds benefits for the person receiving the payment. Firstly, one has the option to invest the money, increasing the value. Sound investments may mean that the person receiving the support payment gets more than when monthly payments are made.
Secondly, one can move on, as problems collecting the money due will not be a problem. Very often one hears of the problems faced by divorcees when the ex-spouse stops making the monthly support payments. A lump sum will mean that there will be no need for court orders to ensure payments.
It is important that the person receiving the payment consider the possible tax implications. Purely the wording used–alimony or settlement–may have a tax implication. A New Jersey family law lawyer can provide the necessary advice on what is the best suitable spousal support option for each individual client.
Source: FindLaw, “Avoid Alimony Monthly Payment Programs“, Feb. 28, 2017