Country star Kenny Rogers’ divorce from his wife Marianne Rogers in 1993 resulted in her walking away with a significant $60 million settlement, including an alimony buyout. Divorce settlements can be a complicated process involving custody arrangements, property division, and ongoing support, adding stress to an already emotional situation. Alimony, also known as spousal support, is a major point of contention during divorce discussions, as it determines the financial support one spouse must provide to the other based on various factors.
California family law attorney Melanie Mandles emphasizes that spousal support calculations are determined on a case-by-case basis, considering factors such as both parties’ earning capacity, needs, and the length of the marriage. Alimony can be paid as ongoing monthly payments or as a lump-sum buyout, each with its own pros and cons. The buyout provides certainty and eliminates future income risk, especially in cases of high asset base and shorter marriages, but may not be feasible for long-term marriages or if assets are illiquid.
One benefit of a lump-sum buyout is the potential for the receiving spouse to remarry or cohabitate without affecting the alimony payments. If the spouses cannot agree on a lump-sum amount, a discount rate must be determined to calculate the present value of the ongoing alimony obligation. The ability to move on with life after divorce is important for both the payor and the payee, as ongoing monthly payments can feel like a burden and hinder emotional and mental freedom.
Planning for the financial implications of a divorce, including alimony arrangements, can help ease the transition to post-divorce life. Creating a spending plan and working with a financial planner to assess assets and income can help individuals make informed decisions about alimony payment methods. Considering the impact of alimony on both the financial and emotional aspects of divorce can lead to a more favorable outcome for both parties involved.
