stressfultimes
New member
Hi everyone, quick question. How can I calculate a lump sum SS payment based on a set monthly amount and duration???
Lump sum SS?
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SingingDad
New member
I'm not sure on the exact calculation but I know it is based on the net after tax benefit. If you do not have access to someone who can run the calculation through Divorce-mate I would suggest the following as a starting point for an estimate:
1) Find the present value of the monthly payments (assume inflation is 1.75%/year... standard right now, and final value is the total dollar amount that would be paid out):
2) Estimate the amount of tax you will now be paying on that amount (ie the amount you would no longer be able to claim because of the LSP) and subtract it from the total.
3) Estimate the amount of tax the recipient will now not be paying because of the LSP and add it to the total.
4) Take the mid point between two numbers.
Here is a simple present value calculator for you:
Present Value Calculator | Calculate Present Value
The easiest way is to get a lawyer to do it... but this should get you a decent estimate.
FightingForFamily
Member
It's not a good idea to do SS this way.
Even if you pay a lump sum, the recipient can still take you to court for more before the ink even dries.
You derive more benefits by paying monthly, such as the tax break, plus the option to deal with material changes in circumstances to lower/stop the payments if it becomes feasible.
The other option is for the recipient to waive spousal support and accept the lump sum as an inequal division of assets (equalizatiion payment).
Once you agree that the recipient is entitled to spousal support in any form, you set yourself up for a long/impossible to battle to get them off that wagon in the future.
Even if you pay a lump sum, the recipient can still take you to court for more before the ink even dries.
You derive more benefits by paying monthly, such as the tax break, plus the option to deal with material changes in circumstances to lower/stop the payments if it becomes feasible.
The other option is for the recipient to waive spousal support and accept the lump sum as an inequal division of assets (equalizatiion payment).
Once you agree that the recipient is entitled to spousal support in any form, you set yourself up for a long/impossible to battle to get them off that wagon in the future.
SingingDad
New member
If the LSP is accompanied with a well worded (read spend a few bucks and get a lawyer to right up a) release for spousal support, then they can't bring you back to court for SS.
I did this because it was the better solution to agreeing to the monthly payment. The release that was signed was about 2.5 pages long and covered any possible grounds that my STBX could bring me back to court on this matter. It also gave me the option to finance the amount and spread out the payments over a longer period of time and actually save money in the long run. If you can afford to, I totally recommend taking this route.
OrleansLawyer
Active member
It can be, to secure a waiver of spousal support after shorter duration marriages or if the parties seek a clean break.
Spousal support almost always brings with it a net tax benefit to the couple. When considering a lump sum, the tax consequences should be shared by the parties.
Substantial negotiations go into this figure. I doubt many payors would be willing to calculate a lump at only inflation since the funds could be invested at a much higher rate.
This seems like a good deal, could you give me an idea of the amounts that SS would have been and what the lump sum was and how you financed it.
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