Lump Sum Child Spousal Support lawyers handle cases where monthly periodic support is replaced with a fixed sum of support. Lump sum support is not deductible off the paying spouse’s tax return nor is it declared as income on the recipient’s tax return. Monthly child support is not tax deductible by the paying spouse (since 1997) nor is it declared as income by the receiving parent. Lump sum awards don’t allow for adjustments after the fact for increases or decreases in income, death of a spouse or child, remarriage, job loss, illness and the like. Lump sum spousal support awards provide a figure calculated for a certain time period discounted for the non-deductibility non-inclusion tax regime and discounted again for “present value considerations” for getting the money paid up front.
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Lump Sum Child Spousal Support is rare and Lorne N MacLean, QC holds the current BC record for lump sum spousal and lump sum child support with a judgment of several million dollars. In today’s blog on Lump Sum Child Spousal Support, we explore basic scenarios and rules when lump sum support could be ordered. Getting focused and experienced help from senior family lawyers will go a long way into helping you increase your chances of obtaining a better outcome.
Lump Sum Child Support
Section 11 of the Federal Child Support Guidelines provides:
11 The court may require in a child support order that the amount payable under the order be paid in periodic payments, in a lump sum or in a lump sum and periodic payments.
In the exercise of the discretion afforded under s. 11, lump sum awards are restricted to cases involving special circumstances, which may include animosity between the parties or a history of non-compliance with court orders; Komori v. Malins, (1996), 24 R.F.L. (4th) 1 (B.C.C.A.) at paras. 70-71; K.V. v. T.E., 2004 BCSC 537 at paras. 38-43; Mansoor v. Mansoor, 2012 BCSC 602 at paras. 95-96.
Lump Sum Child Spousal Support
Lorne MacLean, QC provided the following legal arguments in a recent lump sum spousal support success:
In Parton v. Parton, 2018 BCCA 273 at paras. 47-48, the Court adopted the analytical framework for addressing this question outlined in Davis v. Crawford, 2011 ONCA 294, where the Ontario Court of Appeal stated:
60. not be made in the guise of support for the purpose of redistributing assets: Mannarino; Willemze-Davidson v. Davidson (1997), 1997 CanLII 1440 (ON CA), 98 O.A.C. 335 (C.A.), at para. 32. Moreover, the governing legislation does not recognize redistribution of assets as one of the purposes of a spousal support award.
61. That said, a lump sum order can be made to “relieve [against] financial hardship, if this has not been done by orders under Parts I (Family Property) and II (Matrimonial Home)”: Family Law Act, [R.S.O. 1990, c. F.3] s. 33(8)(d).
62. In any event, the purpose of an award must always be distinguished from its effect. Any lump sum award that is made will have the effect of transferring assets from one spouse to the other. The real question in any particular case is the underlying purpose of the order: Willemze-Davidson at para. 32.
63 Similarly, it is well accepted that an important consideration in determining whether to make a lump sum spousal support award is whether the payor has the ability to make a lump sum payment without undermining the payor’s future self-sufficiency.
66. Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.
67. The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example, short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.
68. Similarly, the disadvantages of such an award can include the real possibility that the means and needs of the parties will change over time, leading to the need for a variation; the fact that the parties will be effectively deprived of the right to apply for a variation of the lump sum award; and the difficulties inherent in calculating an appropriate award of lump sum spousal support where lump sum support is awarded in place of ongoing indefinite periodic support.
69. In the end, it is for the presiding judge to consider the factors relevant to making a spousal support award on the facts of the particular case and to exercise his or her discretion in determining whether a lump sum award is appropriate and the appropriate quantum of such an award.
For more information on lump sum spousal support payments, the Federal Governments SSAG commentary may be of interest to you.
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