Yes. The Florida statute even used to authorize until in 1949, Yandell v. Yandell, 39 So. 2d 554 (Fla. 1949) said that it is “ordinarily the better practice…to direct periodic payments of permanent alimony and a lump sum award should be made only in the those instances where some special equities might require it or those instances where some special equities might require it or make it advisable.”
But, in 1988 the Florida supreme court realized it was silly to require regular payments and authorized the transfer of real estate as lump sum alimony. Troconi v. Troconi, 466 So. 2d 203(Fla. 1985). After that, it became very common for to award the wife the marital home in lieu of alimony.
But isn’t lump-sum alimony just redistributing the property to avoid the law’s requirement that marital assets’ “distribution should be equal” Fla. Stat. Sec 61.075(1). That’s what a lot of people have thought and there have been lots of cases regarding this issue and outside of the second judicial district (Tallahassee area) lump-sum alimony is allowed.
Typically, the needs and ability test must still be met if lump sum alimony is going to be awarded. If the other person can maintain themselves, they don’t get alimony even in lump sum.
What is the big deal with calling it a distribution or lump-sum alimony? Isn’t money just money?
No. First, a distribution is not taxable. Alimony is taxable to the receiver and a deduction to the payor. Alimony awards made after January 1, 2019 will be taxable to the payor. So, there may be some kind of tax advantage to calling part of a distribution “lump-sum alimony”.
Secondly, lots of lump-sum distributions are not really lump-sum, they are made in a series of payments. If the lump-sum distribution is in payments, is this form of maintenance modifiable after a substantial change of circumstances? Different courts in Florida have different opinions on that subject.
Why would anyone want lump-sum alimony when there are tax consequences and, if made in payments, the paying party could renege?
It’s very simple, in an extremely hostile divorce there is no trust whatsoever. Not even enough trust that the alimony payor will follow the court order with all the consequences the can befall someone who breaks a court order. Often it’s just easier to say, “You keep 75% and he keeps 25% and there’s no alimony.” This allows the parties to have a complete and clean break from each other.
There would be no motions for modification perpetually hanging over the alimony-receiver’s head. This is especially true when the alimony-payor is a business owner with almost complete control of his income.
The more erratic the alimony payor’s income, the more likely a lump-sum alimony award will be made.
“Lump sum alimony is also justifiable as a means of providing support when unusual circumstances make permanent periodic alimony untenable…It actually may be preferred over permanent periodic alimony in some situations where, for example, there are no children, the lives of the parties will diverge, and when property has been acquired by the joint efforts of the parties.” Jackson v. Jackson, 507 So. 2d 1160, 1163 (Fla. 1st DCA 1987)
With Naples, Florida as a concentration of older, wealthier retirees from out-of-state, it is easy to see how lump-sum settlement would make sense for a lot of people in this area.
Obviously, lump-sum alimony is not as simple as the phrase, itself, sounds. Contact my Naples, Florida law firm to schedule an appointment with me to consider all your options.