Lump Sum Awards of Virginia Spousal Support

In virtually every case I’ve seen, spousal support is a specific amount of money paid each month from the higher earning spouse to the lower earning spouse. In virtually every case I’ve seen, the higher earning spouse hates this. Like, really, really hates this. In virtually every case I’ve seen, he (it’s usually a he) tries to figure out a way to outsmart the system.

Since the rules changed – meaning that spousal support is no longer tax deductible to the person paying it or taxable to the person receiving it – the suggestions I’ve seen from husbands about how they’ll avoid paying month monthly to their ex have grown wilder and more extravagant.

Recently, a husband of a friend of mine tried to throw his ex wife’s inability to refinance the marital home into her own name (because he abandoned her without any means to pay the family’s bills, killing her credit score) as a way to try to extort her to give up her spousal support. In exchange for her waiver of spousal support, he claimed, he’d let her mom purchase the house in her name – but if she refused to agree, the house would be listed and sold.

He then proceeded to tell the children that he had done everything possible to help their mother keep the only home that they had ever known.

It’s wild out there, y’all. (In case you wondered, she told him to shove it.)

Another suggestion I’ve seen is lump sum support. In a lot of ways, this isn’t a total cop out. It’s not a proposal that spousal support NOT be paid, anyway. It’s just a different way of looking at spousal support.

Now, in general, we usually calculate spousal support (using the Fairfax guidelines) and then kind of negotiate from there. We’re looking at the lesser earning spouse’s need, the higher earning spouse’s ability to pay, the statutory factors, and duration of the marriage. Generally speaking, spousal support is modifiable, unless the agreement or court order says it is not – so it usually lasts a term of years or months, or up until retirement (which would constitute a material change in circumstances, and so justification for a modification).

For younger married couples, it’s usually a period of years or months. For a less than 18-19 year marriage, we often see half the length of the marriage. For very, very short term marriages, we may only see a term of months. It’s possible to see more or less than that, too; it all depends on what the parties can negotiate. I once had a case where half the length of the marriage was 8 years, but we negotiated that my client would receive support for 12 years, though the monthly benefit would be slightly less than under the 8 year scenario.

For older divorcing couples, ‘permanent’ spousal support is possible, meaning that it lasts until (1) death, (2) remarriage, or (3) cohabitation, or until a material change in circumstances (usually, retirement) occurs. It’s not that, after retirement, the lesser earning spouse is deserving of nothing; it’s just that, once the higher earning spouse has retired, the retirement earnings will start coming in, and she can live off of that instead.

But if I want lump sum spousal support – and he’s willing to pay it – can I get it?

Sure. There aren’t really any rules here. I think it’s probably unlikely that a judge would order lump sum support; I can only think of monthly awards of spousal support that I’ve seen ordered by a judge. But, if you could agree, you could certainly structure your spousal support award as a lump sum.

The only trouble I see here is that it requires a fair amount of guessing. How much support would you receive, per month? How long is he expected to live? When is he expected to retire?

In general, a husband who pays a lump sum is looking for a discount for paying up front. Right? So, it’s not like if the Fairfax guidelines told you that you’d get $1,500 a month, and you were married for 18 years, that he’d pay you $144,000 today. (To get that number, I ran $1,500 a month, times twelve months in a year, times 9 years – which is half of 18.)

No, he’d probably offer something like $100k. So, you’d have to determine, on balance, whether it’s worth the possibility of getting $44k less over 9 years in order to have $144k today. You’ll want to look at whether he might retire early, whether he’s in poor health, whether you might remarry (remember, spousal support terminates if you remarry, but if you get the money up front, you can marry without worrying about it terminating your award.)

There’s a bit of guesswork there. And you’re both going to want to figure out a number that will make you ‘win’. For him, he’ll want to pay less than if he were paying monthly. For you, you’ll want to know that you probably wouldn’t receive the benefit of that full amount anyway – either because he’ll die, because he’ll retire, because he’ll lose it all, or because you want to remarry anyway. Maybe there’s some other reasons, but, in any case, it’s going to be a complicated weighing of options.

I find it hard to even calculate and propose these numbers. And, in most cases, there really isn’t the possibility, because there just isn’t that much liquid money for either spouse to draw from to make a lump sum payment.

It’s also possible that you trade off benefits. Say, instead of him paying you $100k, you reduce his interest in the equity in the home by $100k, allowing you to refinance and get a lower mortgage rate, but effectively NOT getting spousal support – and not paying out of your proceeds to buy him out. There are a lot of possibilities; just looking at options here.

I always advise women to be careful about taking on more than they can handle in terms of the marital home, but it’s often a big deal. Keeping the house matters to a lot of women, so, if that’s your goal, we can also look into ways to achieve that.

Lump sum is unusual, but it’s not impossible. We’ll have to do a bit of guesswork, and a whole lot of negotiation, but it’s certainly not unheard of.

For more information about spousal support in general, or to request an appointment with one of our licensed and experienced Virginia divorce attorneys, give us a call at 757-425-5200.