Definition of Lump Sum Alimony
Alimony or spousal support payments are made to support a spouse after a divorce or if the couple separates and chooses not to live together. Alimony payments can be made periodically or awarded in lump sum payments. If the court determines a lump sum alimony payment should be made then spousal support is paid in one fixed payment from one ex-spouse to the other.
Lump sum alimony is often awarded if there is little or no property. There are also benefits for lump sum alimony payments. For instance, termination of spousal support payments may not affect a lump sum alimony payment. Lump sum alimony can also be awarded by the court if one spouse is paying for specific divorce expenses. Lump sum alimony can also be made payable to the estate of the recipient, should they die, if the alimony agreement so states.
Consider also, lump sum alimony cannot be modified. For example, a spouse who declares bankruptcy cannot discharge spousal support payments. Lump sum alimony differs from periodic alimony payments, which are generally paid monthly over the course of a specific time period and may be modified under specific conditions such as a remarriage.
Due to tax implications of receiving alimony, all issues for spousal support should be discussed with a tax attorney prior to finalizing the divorce agreement.
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