As a couple in Florida deals with the dissolution of a marriage, the issue of alimony may be considered to mitigate economic conditions deemed to be unfair to one of the parties. Common situations include stay-at-home parents who have been out of the workforce for an extended period of time. Alimony may be helpful for enabling that individual to seek education and other training for reentering the workforce. However, alternatives to alimony might be considered in certain situations.
A lump sump in place of ongoing alimony payments may seem attractive to the individual who owes the funds. This may enable that person to make a clean break from the marriage without ongoing challenges of remembering payments each month. This may also reduce the stress in new relationships by ensuring that financial obligations will not affect a future marriage. However, the prospect of a lump sum might be difficult if an individual does not have the resources to make such a payment.
A party considering accepting such a settlement may find the idea of a larger sum of money at one time to be attractive. However, the manner in which such a payment is classified may affect the tax implications. An individual receiving a lump sum might want to work with an accountant to discuss these issues and to analyze the long-term implications of alimony payments as opposed to a lump-sum settlement.
As a party to a divorce action evaluates the proposition of a settlement in place of alimony, legal counsel may be important to ensure that the proposal is deemed to be fair and appropriate. An attorney may serve as a liaison during the settlement process, helping a client to understand benefits and risks of a settlement while communicating priorities back to the other party.
Source: Findlaw, “Alimony“, November 17, 2014