Unfortunately, divorce comes with many financial consequences, including spousal support. It is rare to find a divorced Maryland man or woman who enjoys paying alimony to an ex-spouse. However, it is an obligation often ordered by the court, especially if one spouse is financially unable to support himself or herself for a temporary period. Although most alimony payments are made on a monthly basis, there is the option to pay it all in one lump sum. Is this something you should consider?
If you have the money to do so, then it is recommended that you pay your ex-spouse the alimony in one lump sum payment. Why? Because by doing so, you don’t have to be reminded – or angered – every month. You can pay it all at once and be done with it. If you have no children together, you’ll be rid of your spouse forever and you can easily move on with your life.
There are benefits for each spouse. The paying spouse doesn’t have to remember to pay every month or be penalized for failing to do so. The spouse on the receiving end gets all the money upfront and can use it for a major purchase, such as a house or car. The money will be worth more because the spouse can invest it or save it and earn interest on it. The receiving spouse also benefits by not having to deal with the headaches involved in trying to collect money from the other spouse.
The only negative is that there may be tax ramifications involved when collecting money as a lump sum. Therefore, couples interested in this option should contact their tax preparer as well as a lawyer to understand all their options.
Source: FindLaw, “Avoid Alimony Monthly Payment Programs,” accessed Nov. 1, 2014