While you may just want to move on and make the relationship with your ex-spouse a painful memory, Toronto law makes it impossible to sever ties right away. One of the arrangements that family court lawyers in Ontario have to plan for is spousal support.
Having to write your spouse a check each month to even out both your financial situations is not an ideal situation, and it definitely makes it hard to leave the relationship behind. Having an additional monthly expense added to your checkbook can be stressful, especially with the looming threat that the alimony amount can be increased at any moment.
The possibility of modifying alimony is another reason why some people may prefer to pay their alimony all at once. This is called lump-sum alimony, and it happens when the higher-earning partner decides to pay the alimony all at once instead of spacing it out over a period of time. This eliminates the possibility of it increasing in the future, but it also takes away the chance of spousal support payments decreasing or stopping should the lower-earning spouse be promoted at work or get remarried.
This may sound like a great idea, but any spousal support lawyer in Ontario will warn you about these three common mistakes.
Beware of Cohabitation
In a traditional alimony arrangement, payments can be suspended when the lower-earning spouse moves in with their significant other. Depending on how quickly your ex gets over the relationship, this can happen a year later or a decade later.
If you already paid your ex their full alimony in a lump sum, then this cohabitation has no effect on your payments. One of the cons of paying lump sum alimony is that there’s nothing you can do about them cohabiting or getting remarried.
Don’t Forget the Impact on Your Taxes
Alimony is income, and lump sum alimony can have a serious effect on that year’s tax season. If one day your ex has $500 in their bank account, and then this amount increases to $100,000 in an instant, the IRS is going to take notice.
Both you and your ex are going to consider the tax implications of your lump-sum buyout. Because of the way it can affect your ex’s taxes, they may object to lump sum spousal support after all.
You’ll Need to Contact a Professional for Family Issues
Each divorce is different. The best way to determine if a lump sum alimony buyout is right for you is to consult a lawyer for spousal support. You should never try to handle any divorce matters on your own, as your ex’s lawyer will likely take advantage of you. The lawyers of Zimmerman Law LLP have extensive knowledge of how alimony can affect both parties in the divorce. Contact our office to set up a consultation!
