Q: My ex-husband wants to pay me my California spousal support in a lump sum instead of in monthly payments. Is this wise?
In California, it is possible to receive lump sum spousal support. This is done when your former spouse decides to pay the entire amount of spousal support to you at one time instead of each month over a period of time determined by the court.
While the decision is yours as far as how you want to receive your spousal support in California, it is important to weigh your options to find out what works best for you. Here are some factors to consider:
- You may be able to avoid future conflict with lump sum spousal support. When your ex pays you a lump sum up front, you do not have to worry about having to collect from him down the road. This also reduces the chance of your San Francisco spousal support checks bouncing and causing you more detriment than benefit.
- You may be able to receive more in a lump sum. The lump sum is calculated based on what you will receive in future payments, not current-day payments. This takes into account the change of value in the dollar, which has the potential to earn you slightly more.
- You will be taxed up front for the entire sum received from spousal support. Your California spousal support is considered income. Therefore, you must report it to the IRS. If you receive it all at once, you will be taxed on what you receive as a whole. This will mean higher taxes for you the year you receive your check.
California spousal support is complicated and one of the hardest things to decide on in a divorce. To make your situation easier, get valuable guidance from a San Francisco spousal support lawyer. At the Law Offices of Paul H. Nathan, we will work with you to help you reach the best resolution for you and your family.