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Post by Deleted on Nov 19, 2015 8:26:55 GMT -5
Do you have kids? If it were me, and I could do it, I'd rather do lump sum just to get it done and over and get on with my life. I'd be ornery every month paying alimony. But, if there are kids you're going to be dealing with him after the divorce anyhow.
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TheHaitian
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Post by TheHaitian on Nov 19, 2015 8:37:58 GMT -5
Do you have kids? If it were me, and I could do it, I'd rather do lump sum just to get it done and over and get on with my life. I'd be ornery every month paying alimony. But, if there are kids you're going to be dealing with him after the divorce anyhow. I agree with what she said!!! 3k/month alimony? How big is the disparity in income :eek:
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buystoys
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Post by buystoys on Nov 19, 2015 8:40:35 GMT -5
I think a big part of your decision may not be money related as much as relationship related. If you use your equity, then you have to pay interest on the money you are using to just get him out of your life. Only you can determine if that is worth it or not.
Me? I'd probably pay the alimony monthly. While it extends the amount of time you are in contact with him, will it cost you that much emotionally? Sounds like you're taking enough of a financial hit as it is.
Best of luck to you!
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Post by Deleted on Nov 19, 2015 8:45:18 GMT -5
I think she's talking about still doling it out monthly, but either taking it out as a Home Equity Loan now and putting it aside somewhere, or just paying him out of cash flow.
To the OP: borrowing it all at once means you're going to be paying interest on $72K from Day One even though he'll be getting the last of it in 2 years. You're already borrowing to cash out his interest in the house. Have you looked at how manageable the total payments will be? If it's a floating interest rate, payments are likely to go up in the future as interest rates rise. I'd be more inclined to have an open HELOC that lets me borrow if/when I need it, but to cash flow what I could. (I'm an actuary and know of two female colleagues who ended up paying alimony; one bought herself a condo in FL with the cash flow freed up after the alimony ended.) Have you considered selling the house and buying something smaller so you're not stuck with mortgage payments PLUS the cost of borrowing to buy him out and pay him alimony?
I hope that I'm right about your not actually paying it all to him at once. He could blow through it all and take you back into court for more money. In my divorce, I'd asked my lawyer about offering temporary alimony and she said absolutely not- it opens the door to them taking you back to court if it isn't enough, they need the time frame to be extended, etc.
Good luck to you- I went through this almost 20 years ago and remarried in 2003. Life on the other side is wonderful.
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TheHaitian
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Post by TheHaitian on Nov 19, 2015 8:47:48 GMT -5
Thankfully no kids. No debt other than what we owe on house ($62K) and a lot of investments and cash. So I'm in a good spot (other than giving up 40% of the net worth I've worked for over 30 years) to pay him out and get on with my life. I will never marry again without a prenup. How long were you married? Just asking... When my wife and I got married we were 23 (dating since 18) and really nothing to protect from each other. Now if we get divorced and I am crazy enough to want to get married I will definitely ask for a prenup.
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moneymaven
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Post by moneymaven on Nov 19, 2015 9:03:34 GMT -5
No advice but I'm sorry you're going through this!
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Anne_in_VA
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Post by Anne_in_VA on Nov 19, 2015 9:05:50 GMT -5
Micky-I'm so sorry you're going through this. I don't have any advice but wish you well.
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Blonde Granny
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Post by Blonde Granny on Nov 19, 2015 9:11:36 GMT -5
I'm certainly no way qualified to offer advice since I've been married to the same guy for 51 years. However, if your options are to pay him off in full, or pay him off monthly and always have the threat of him demanding more, I would likely suck it up, pay him and be done with him.
As others, I wish you some peace and happiness going forward.
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buystoys
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Post by buystoys on Nov 19, 2015 9:13:19 GMT -5
Another thing to consider is the possibility of your personal circumstances changing over the next few years. Things happen. While you may have a good job and not anticipate losing it, something unexpected could happen and you could find yourself in a much different financial position down the road. If you don't rush to get rid of your soon-to-be ex, you might not end up getting hit with additional requests to finance his lifestyle.
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Ombud
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Post by Ombud on Nov 19, 2015 9:22:52 GMT -5
If the alimony is out of monthly cash flow (not home equity), do that. Not a bad time to refinance house to get rid of him that way. I wouldn't take on a 2nd
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haapai
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Post by haapai on Nov 19, 2015 9:24:07 GMT -5
It's not clear from your post whether you will be refinancing the house or getting a HELOC. I also can't tell whether this is something that you are contemplating doing just to pay off the alimony as an undiscounted lump sum or something that has to be done anyways.
In other words, we don't know how your house is titled.
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haapai
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Post by haapai on Nov 19, 2015 9:39:56 GMT -5
We also don't know if you prepare your own taxes or use a pro. At this moment, I'm really hoping that you have someone in your life who can accurately predict the tax ramifications of a change in filing status.
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justme
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Post by justme on Nov 19, 2015 9:41:26 GMT -5
Ah yes the taxes, I believe alimony you pay is not taxed and alimony you receive is taxed.
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Deleted
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Post by Deleted on Nov 19, 2015 9:49:10 GMT -5
Thanks for the kind words everyone. I refuse to feel like a victim (I'm trying), I made my choices and probably stayed in the marriage too long. An expensive mistake, but I figure I'm still young enough to make a lot more money and make up what I am losing. I'm sure I will be posting some future emails about how to build back up my 401(k) and pay off my new house debt more quickly (I hate debt and was on track to have the mortgage paid off in 4 more years but oh well), it's setting me back but at least I will be done supporting him once this is done and can having financial control of my life back. Yes, it's definitely possible to recover from a financially disastrous marriage. I divorced in 1997 at age 44. At the time, I had about $200K in investments, $100K equity in the house I'd just bought, and a 12-year old son. No alimony but no child support from him, either- he was an alcoholic and never worked in a serious job again. I just retired last year at age 61. Current DH is 15 years older and has far more modest tastes than my Ex and turns over nearly all of his SS to me (minus some spending money) because he'd rather have me manage the money. A match made in heaven! We also have very similar ideas about when to be frugal and when to splurge.
Congratulations on getting loose from him and getting financial control of your life back. It's a wonderful feeling!
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haapai
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Post by haapai on Nov 19, 2015 9:49:53 GMT -5
I was thinking more about how filing single will be a shock after all those years of filing married filing jointly and all that income growth.
I don't even want to contemplate the possibility of filing married filing separately.
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whoami
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Post by whoami on Nov 19, 2015 10:08:45 GMT -5
If Im receiving alimony, I want it all up front.
If Im paying it, Id do it monthly for a variety of reasons. Your income could change. If you have already paid out the 2 years (and Id want to verify that) there is probably no going back to recoup that money. There is also the tax issue. His income could change or he could remarry in which case, the alimony stops but again, if its been paid upfront, good luck getting it back.
I realize you want him out of your hair but if its an auto deduction, you wont have to bother with him.
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Post by Deleted on Nov 19, 2015 10:49:31 GMT -5
If you give all the alimony to him up front, make sure you have an iron-clad Settlement that says you're done with alimony, no matter what happens in the future. My Ex got out of our divorce with $100K from the equity in the marital home (thus, no taxes to be paid on it) and within a few years he'd blown through it all and was living on the streets. I hope yours has more sense but still, consider worst-case in writing up an agreement.
You need to get some good tax advice about whether lump-sum alimony would be entirely tax-deductible in the year you pay it out. It might not even be considered alimony for tax purposes. Not my area of expertise.
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haapai
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Post by haapai on Nov 19, 2015 11:39:08 GMT -5
The tax treatment of alimony paid is worth a tremendous amount to you. That's $36K a year less taxable income for you.
Does that answer the question of whether to pay alimony or negotiate for a lump sum payment or increased property division? Hint: I think it does. It's highly unlikely that your STBX will offer an alternative settlement that makes up for the foregone tax benefits of alimony paid. This is particularly clear in this case where it looks like he will exit the marriage with plenty of cash and no debt.
The question of whether to take extra money out of the house is separate from the decision to structure part of the divorce settlement as alimony. In order to answer that question, you have to study your post-divorce budget and taxes.
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cktc
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Post by cktc on Nov 19, 2015 12:17:30 GMT -5
You need to get some good tax advice about whether lump-sum alimony would be entirely tax-deductible in the year you pay it out. It might not even be considered alimony for tax purposes. Not my area of expertise. I don't think you get a tax break on a lump-sum, this article says it's usually considered part of the settlement. www.forbes.com/sites/jefflanders/2011/11/30/seven-key-things-women-need-to-know-about-the-tax-implications-of-alimony-payments/Either way, you might be surprised to find your net worth will quickly recover and improve from this divorce. I doubt he was only spending the $20k per year he was bringing in while you are married if he will be living on $59k now.
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Abby Normal
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Post by Abby Normal on Nov 19, 2015 12:25:18 GMT -5
First- sorry you're going through this. Second- I'd be inclined to send him a monthly check that has a note attached saying " Worth every penny to have you out of my life".
But I'm like that.
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haapai
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Post by haapai on Nov 19, 2015 12:30:10 GMT -5
You never answered the question of whether you did your own taxes or use a pro.
A tax professional might have some really interesting and valuable things to say to you. Without your STBX's deductions and low brackets, taxes are going to change a lot! The sooner that you get a handle on that new terrain, the better you can plan.
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whoisjohngalt
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Post by whoisjohngalt on Nov 19, 2015 12:36:08 GMT -5
There are some people who hold law degrees and also CPAs. I would find one of them and pay a few hundred dollars to sit down with them to run through all the possible scenarios. Also, they are not emotionally involved in the situation as you are.
Bc knowing myself, I would want to pay it out NOW and never see the guy again, but financially, it might be a stupid decision.
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haapai
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Post by haapai on Nov 19, 2015 12:41:24 GMT -5
There's nothing wrong with putting a price tag on an emotional decision. Sometimes that's what you have to do in order to talk yourself out of it.
And sometimes when you actually sit down and calculate the price of what everyone tells you not to do, it comes in so low that it's worth it. I don't think that's the case here, but it does happen every once in a while.
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emma1420
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Post by emma1420 on Nov 19, 2015 12:53:10 GMT -5
Personally, I would probably go for a lump sum settlement (especially if it gets reduced to say 50-60K from the 72K you would pay over two years). A lump sum settlement, implies that the situation is now final. My mother got alimony after her divorce. It was supposed to just last five years immediately following her divorce. She kept going back to court and she got alimony for almost 20 years.
Although to be honest, I don't understand why any court would provide an able bodied person who is capable of working with alimony. Particularly, when they are receiving half of all the joint assets in the marriage, and those assets are more than enough to live comfortably for quite awhile.
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ArchietheDragon
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Post by ArchietheDragon on Nov 19, 2015 12:54:17 GMT -5
Although to be honest, I don't understand why any court would provide an able bodied person who is capable of working with alimony. Particularly, when they are receiving half of all the joint assets in the marriage, and those assets are more than enough to live comfortably for quite awhile. Oh boy... don't open that can of worms.
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MJ2.0
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Post by MJ2.0 on Nov 19, 2015 12:59:12 GMT -5
Personally, I would probably go for a lump sum settlement (especially if it gets reduced to say 50-60K from the 72K you would pay over two years). A lump sum settlement, implies that the situation is now final. My mother got alimony after her divorce. It was supposed to just last five years immediately following her divorce. She kept going back to court and she got alimony for almost 20 years. Although to be honest, I don't understand why any court would provide an able bodied person who is capable of working with alimony. Particularly, when they are receiving half of all the joint assets in the marriage, and those assets are more than enough to live comfortably for quite awhile. And especially when there are no kids involved.
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TheHaitian
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Post by TheHaitian on Nov 19, 2015 13:01:10 GMT -5
Although to be honest, I don't understand why any court would provide an able bodied person who is capable of working with alimony. Particularly, when they are receiving half of all the joint assets in the marriage, and those assets are more than enough to live comfortably for quite awhile. Oh boy... don't open that can of worms. Yep let's not start...
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whoisjohngalt
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Post by whoisjohngalt on Nov 19, 2015 13:03:06 GMT -5
There's nothing wrong with putting a price tag on an emotional decision. Sometimes that's what you have to do in order to talk yourself out of it. And sometimes when you actually sit down and calculate the price of what everyone tells you not to do, it comes in so low that it's worth it. I don't think that's the case here, but it does happen every once in a while. You should always know all your options without the emotional side. You can add your emotions any time later.
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whoisjohngalt
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Post by whoisjohngalt on Nov 19, 2015 13:04:48 GMT -5
Personally, I would probably go for a lump sum settlement (especially if it gets reduced to say 50-60K from the 72K you would pay over two years). A lump sum settlement, implies that the situation is now final. My mother got alimony after her divorce. It was supposed to just last five years immediately following her divorce. She kept going back to court and she got alimony for almost 20 years. Although to be honest, I don't understand why any court would provide an able bodied person who is capable of working with alimony. Particularly, when they are receiving half of all the joint assets in the marriage, and those assets are more than enough to live comfortably for quite awhile. And especially when there are no kids involved. Especially since he is younger! So, if she can keep working, so should he! And kids are usually covered under child support anyway
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ArchietheDragon
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Post by ArchietheDragon on Nov 19, 2015 13:06:02 GMT -5
And especially when there are no kids involved. Especially since he is younger! So, if she can keep working, so should he! And kids are usually covered under child support anyway He wasted the best years of his life with her and supporting her while she moved forward in her career. That is worth something.
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