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  • Spousal support - lump sum plus installments

    I would like to consider offering to make a lump sum pmt and then limiting the monthly support payments to say 5 years rather than open ended. For example a lump sum of $50,000 with monthly payments of $1,000 per month for 5 years. I understand that the lump sum would not be taxable income to the recipeint nor deductible by me, but that the insatllemt payments would be taxable/deductible.

    My ex is over 45 and the marriage lasted 20 years. My lawyer is telling me that this is not a good approach because the ex could burn through the money and go back to the court and ask for more, but that that a larger one-time payment with no monthly suuport and getting a full and final elase would preclude the ex from coming back for more. Is thsi true?

    What about an inital lump sum of $50,00 and then four intsallments of say $12,500 every 6 months for two years; could the ex come back uner that scenario?

  • #2
    First of all, regardless of age or duration of marriage, she must still be able to show eligibility for spousal support. Has your ex stopped working for most of the marriage to look after kids?

    What is her current employment situation? How far apart are you incomes?

    If she is working full time too, and your incomes are within 40% of each other, she may not qualify for much or any spousal support. You might offer limited support for 1 year to get her on her feet following the divorce as part of a settlement.

    Your lawyers advice is correct. You could agree to a larger settlement/equalization payment in exchange for a total waiver for spousal support.

    Or, if you are going to pay spousal support, do so only according to the SSAG (Spousal Support Advisory Guidelines). Lump sum payments are not SS and not covered by the SSAG and can come back to haunt you. Additionally, why deprive yourself of the tax deduction? It helps me a lot.

    Don't invent your own spousal support rules and expect her to follow them. Either get a waiver, or follow the SSAG.

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    • #3
      Thank you for the response, gives me good food for thought.

      My income is vastly higher than her current income, she no longer works full time, I should have seen this coming. Mine is about 3.5 times higher, after tax. What has been agreed to on a without predjudice basis, is SSAG mid range - so looks like I should agree to that or a large up front oayment with a release.

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      • #4
        Originally posted by anbi View Post
        Thank you for the response, gives me good food for thought.

        My income is vastly higher than her current income, she no longer works full time, I should have seen this coming. Mine is about 3.5 times higher, after tax. What has been agreed to on a without predjudice basis, is SSAG mid range - so looks like I should agree to that or a large up front oayment with a release.
        Did she stop working full time during the marriage as a mutual decision, or after the separation? If the latter, your spousal support should be calculated on her previous full time income.

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