Using Structured Settlements for Alimony
You can use structured settlement for child support obligation and alimony. This will effectively reduce possible costs you may incur in court proceedings to resolve issues that may come up due to delays of payments. You can use a non-qualified structured settlement. This will not only lift the burden from the husband or, in rare cases, wife paying alimony to the ex-spouse, it will also ensure that payments are made on time.
Unstable Income
If the paying spouse has an unstable income, he or she can set up a structured settlement when money is available. This one-time set up will effectively relieve you of all the worries in the future. It doesn’t only save you of all the problems in the future, it is also a wise financial investments since you wouldn’t have to worry about how inflation will affect the money you are putting in. The insurance company will take care of that.
Spouse Living Far Away
If either of you are living far away from the other, the insurance company will also relieve you of having to regularly contact each other to coordinate on how the alimony is going to be paid. The negotiation will always happen between the receiving spouse and the insurance company and the insurance company and the paying spouse.
Property Division
A lot of negativity between ex-spouses arise when the division of properties are being negotiated and by having no other guarantee but the promise of the paying spouse to pay on time. The structured settlement will keep this from happening. Single or multiple income streams can be set up to provide for different payment needs like college funds, retirement fund, medical expenses or lifetime payments. This can also be set up so that conditional release may be allowed which means that funds are to be released only when certain events are proven to occur such as certain educational needs.
Tax Implications
Child support and property distribution are non-taxable but any other interest received from annuity payment is taxable. To which spouse the interest accrued goes to will be negotiated in the beginning of the set up.
Advantages of structured settlement to paying spouse
- Savings in discounted cost of payments
- Avoid unnecessary contact with ex-spouse
- Avoid conflict that may arise from delayed payments
- Settle the future now
Advantages of structured settlement to receiving spouse
- Guaranteed payment from a large financial institution
- Not subject to creditors of ex-spouse
- Avoid unnecessary contact with ex-spouse
- Can be set up as creditor proof
Related posts:
- Structured Settlements For Seniors
- The Difference Between Tax-Free and Tax-Deferred Settlements
- Advantages and Disadvantages of Structured Settlements
- Disadvantages of Structured Settlements
- Structured Settlements with Special Needs Trust
