Monthly alimony payments can be a double-edged sword. You want the money but would rather not have the reminder of a failed marriage at the first of every month. Even more than the reminder, you do not want to worry about whether you will receive a support payment this month, or next month or the month after. Do you have any options in a California divorce?
Yes, you do have an option, according to FindLaw. You can receive one lump-sum payment in lieu of monthly payments. All of the alimony due would then be given to you up front, releasing the payer from all future payments. There is no bargaining the price down, either; the lump sum must be equal to the total of all monthly payments.
The plus side of this arrangement is that you would have a large amount to invest, which gives you more earning power, whether that is simple interest payments or other investments. You can also use it as a down payment on a home. Keep in mind, however, that the money is meant to help you maintain the quality of life you had with your spouse, and there won’t be any more coming to you.
Another benefit of a lump-sum payment is not having to hassle with an ex-spouse who does not pay on time. You will not have to go to court seeking a judgment ordering payment from your ex; you will not have to keep tabs on where your ex is working or living. You can move on with your life.
There is a drawback to this type of payment, however. If the payment is named as “alimony,” it could be taxed as income, and you would owe taxes on the full amount for the year in which you receive it. If, however, the amount is labeled as a “settlement,” you may not need to pay taxes on it.
You must agree to receive alimony as a lump sum, it cannot be paid in that manner without your consent. You may wish to consult an attorney or another legal or financial expert about your options.
This article addresses lump-sum alimony payments in a general manner only. As such, it should not replace the advice of an attorney.