Maintenance – lump sum or payments?

//Maintenance – lump sum or payments?

Maintenance – lump sum or payments?

Many clients who are in a position to receive maintenance (formerly known as alimony) are not sure whether they should take the promise of monthly maintenance payments from their spouse or take a lump sum. There are several good reasons to take a lump sum, especially with New York’s new maintenance guidelines. New York instituted new maintenance guidelines which went into effect this past January for cases filed January 23, 2016 and later. The idea behind the guidelines was for litigants to have a better understanding of how the court would decide on maintenance payments. Once the payments are clearer, it becomes beneficial to opt for a lump sum now in lieu of the promise of payments over time. Maintenance payments tend to cease in the case of the payor’s death, marriage of the payee spouse etc., but with a lump sum, the payee doesn’t have to be concerned with these possibilities. In addition, the payor may make financially bad decisions or stop working for a myriad of reasons, leaving the payee spouse no recourse but to take the payor to court. Even if successful on the merits of the case, it may be difficult to actually get the payments going again. The payor still has the option under the new rules of going for a modification. Taking a lump sum also protects the recipient in case of the death of the payor, and allows him or her to cohabit or remarry as he or she chooses without worrying about losing benefits. This, however, may be a reason that the other side will negotiate for a smaller lump sum than payments might otherwise amount to.
Once the decision for a lump sum has been reached, the recipient is in a similar position to that of a lottery winner, and we know that statistically they do not always retain their winnings over time. Should a recipient decide to take the lump sum in lieu of payments over time, they would be well advised to speak to a certified financial planner as to what to do with the money to ensure that they will indeed be financially taken care of over the course of their lifetime.

By | 2017-01-13T15:00:10+00:00 September 9th, 2016|Divorce Law|0 Comments

About the Author:

Deborah E. Kaminetzky is the founding member of Kaminetzky Law & Mediation, P.C. located in Cedarhurst and Garden City, New York. Prior to starting the firm Deborah worked at a Long Island firm where she learned the practice of Matrimonial and Family law and Estate Planning. Deborah has also worked at the New York City Department of Consumer Affairs where she was responsible for prosecuting unlicensed home improvement contractors and negotiating settlements for consumers. Prior to practicing law, Ms. Kaminetzky was the president of a commercial property management corporation in the New York Metro area. Ms. Kaminetzky is a member of the American Bar Association (General Practice, Solo and Small firm Division and Law Practice Management Sections), National Association of Divorce Professionals, New York State Council on Divorce Mediation, Family and Divorce Mediation Council of Greater New York, New York State Bar Association (Business Law, Estate, Family Law, ADR and General Practice Sections), Nassau County Bar Association (where she serves as Vice Chair of the General, Solo and Practice Management Committee, and is active in the Community Relations and Education Committee) and The Nassau County Women’s Bar Association. Ms. Kaminetzky was appointed to the Committee on Law Practice Management of the New York State Bar Association in 2015 and has been a frequent speaker and author of articles for their journal. Ms. Kaminetzky serves on the Board of Directors of the Yashar Attorney and Judges Chapter of Hadassah as a their Treasurer, and was their Woman of the Year 2012. Deborah graduated from New York Law School in 1991 and the University of Michigan, Ann Arbor in 1986. Ms. Kaminetzky was admitted to the First Department in 1991 and the United States Supreme Court Bar in February of 2015. Deborah is on the Matrimonial fee dispute arbitration panel for Nassau County. She expanded her alternative dispute resolution practice by completing a Mediation certificate program in December of 2013, an advanced Mediation certificate program in 2015 and most recently a Divorce Mediation certificate in early 2016 from The New York Peace Institute. Ms. Kaminetzky has spoken to various groups on topics including matrimonial law, technology and social media use, and disaster preparedness for business including cybersecurity.