When a couple decides to divorce, disputes over money are common — particularly when it comes to issues of spousal support.
You may be able to make your support payments comfortably today, but a significant portion of your wealth could be gone in an instant if you make an unsavvy investment, face a lawsuit, lose your job or fall ill. It may give you more peace of mind if you can do away with your financial obligation once and for all instead of having a nagging debt every month.
If you’re not thrilled about the idea of making monthly support payments to your ex, take heart: You may have options.
Making a lump-sum payment
One alternative to making multiple payments for years is to make a single, lump-sum one just once. You may be able to negotiate a slightly lower payment amount in exchange for you paying all that you owe at once.
There are some downsides to making lump sum spousal support payments. Tax issues and early withdrawal penalties from investments can be a problem It’s generally wisest to speak with a financial advisor about the situation before you decide to go this route.
Allocating additional property instead of alimony
Another alternative to making monthly spousal support payments or making a lump sum cash payment is to offer your spouse additional property concessions, shares in a company that you own or even grant them a portion of your pension.
Again, however, there are plenty of pitfalls to this plan that should be discussed with a financial advisor before you decide to act.
Preparing for spousal support discussions in your divorce
If there’s one thing that you’ll learn quite quickly in negotiating your divorce, it’s that each couple’s situation is unique, and each spouse has their own end goals that they’re pursuing. An attorney can help you navigate this process in a way that best protects your financial interests.