When spouses in Colorado divorce, they expect that once the final papers are approved by a judge, they can each walk away as separate individuals into their newly single lives. However, sometimes certain divorce issues tie a couple together even after they have ended their marriage. One of these issues is alimony.
Alimony, also known as spousal support, is money paid by one spouse to the other. Usually, it is the spouse with the greater income that is paying spousal support monthly to the lesser-earning spouse, until the lesser-earning spouse is able to support themselves financially. This means that one spouse may be paying spousal support to their ex every month for years.
However, it is important to keep in mind that there may be an option to monthly spousal support payments -- a one-time lump sum spousal support payment. In this manner, the paying spouse can pay the entire amount of what they would owe monthly all at once.
There are some plusses to receiving a lump sum spousal support award. By receiving such a large amount of money, it is possible to invest it, meaning the receiving spouse would ultimately get more out of the spousal support award. Also, if all of one's spousal support is paid at once, there's no chance that the payments will become delinquent. This can save time and money for both parties.
However, those who are interested in receiving a lump sum spousal support award should be aware that there are tax consequences for doing so, depending on how the award is classified. An attorney can provide more information on how spousal support is taxed in Colorado.
In the end, some people may find it preferable to pay or receive a lump sum spousal support award, rather than traditional monthly payments. However, any of these options have their advantages and disadvantages, which should be thoroughly explored before a decision is made.
Source: FindLaw, "Avoid Alimony Monthly Payment Programs," Accessed Dec. 11, 2017
Tags: Divorce
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