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Avoiding long-term alimony: The lump-sum payment

If you've been ordered to pay alimony, it may feel like a shackle to the marriage that just won't go away. Monthly alimony payments remind you of everything you still owe your ex, making it hard to move on.

The good news is that there are options that allow you to avoid monthly payments. For instance, you could offer your ex-spouse a lump-sum payment. A lump-sum payment makes it possible to pay everything you'd owe all at once, so you wouldn't have to worry about any future payments at all. You'd eliminate your risk of collection issues and be able to completely rid yourself of any connection to your past marriage.

Keep in mind that you may still have to pay the same amount of money that you would have over time, and there are typically tax consequences for lump-sum payments. As the person paying, you may not have to worry, but the person receiving it could be taxed on the sum significantly. For this reason, your ex may not wish to accept a lump-sum payment. If you can get the payment issued as a settlement, then the person receiving it should not have to pay taxes, which is good for the person receiving it.

If you do choose to send a lump-sum payment, it can work in your favor on your taxes as well. Generally, individuals are allowed to write off any lump-sum payment, which helps you save money on your taxes. However, at the end of 2018, there are substantial changes to tax laws regarding alimony.

Alimony doesn't have to hold you back. Consider making a lump-sum payment to your spouse and you'll be able to avoid paying alimony in the future.

Source: FindLaw, "Avoid Alimony Monthly Payment Programs," accessed June 06, 2018

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