Alimony is defined as a payment from one spouse to the other pending separation or after divorce. Alimony is also referred to as “maintenance” in some states. In the majority of cases, alimony is paid to the wife from the husband, although the wife may be required to pay alimony if the husband is the homemaker and primary caretaker of the children. If you are going through a divorce or separation, you may want to discuss your case with a divorce attorney.
This type of alimony is awarded after a divorce and consists of recurring payments that may change or end if the receiving party remarries.
During divorce proceedings or separation, ongoing payments may be awarded. Temporary alimony can include money for divorce costs and daily living, and it is paid until the court has made a determination on permanent alimony.
Lump Sum Alimony
This form of alimony is paid all at once. Only some states allow lump sum alimony payment. Also known as alimony in gross.
Understanding Alimony and Child Support
While child support payments are often made to provide financial assistance to the ex-spouse with custody of the children, sometimes alimony is used for this purpose instead. Child support is neither tax deductible for the payer nor taxed as income for the recipient. Alimony, on the other hand, is usually structured so that the payments are deductible by the payer and treated as gross income by the payee. For some, this arrangement may be more beneficial for tax purposes. When settling a divorce involving children, the parties generally decide how to structure child support and/or alimony payments so that taxes are reduced.