Spousal Maintenance is commonly thought of as a monthly payment to a former spouse paid over a certain period of time. However, the parties can agree that Spousal Maintenance will be paid with a one-time lump sum payment, in lieu of the monthly payments. The Court also has the discretion to award a lump sum payment in lieu of the monthly payments.
A lump sum payment has potential benefits for both parties. The obligor spouse will have the peace of mind that he/she is not paying his/her former spouse each month. The obligee spouse will have the financial freedom to invest the lump sum payment. In other words, both parties are able to move on with their separate lives.
However, a lump sum payment is not feasible for all divorcing couples. There must be sufficient assets available for this option to even be discussed. Also, the obligor spouse should ensure that he/she has an earning ability that will allow him/her to “bounce back” from this large payment (keep in mind, this is still separate from property division, which will be paid separately (if necessary)).
Another important thing to keep in mind when negotiating a lump sum spousal maintenance payment is the tax consequences associated with such a payment, which will depend on your specific situation.
If you have any questions about spousal maintenance, please call me today at 651-647-0087 or reach out via our online contact form to set up your free consultation.