STRUCTURED SETTLEMENTS FOR DIVORCE SETTLEMENTS

Move Forward with Customized Reliable Payment Streams Without The Hassle

Divorce Structured Settlement Solutions

Divorce structured settlements could be looked at as alimony insurance. A divorce structured settlement can provide assurance to the ex-spouse receiving child support obligations, alimony or equitable division of marital property in the form of periodic payments that will be received On Time Every Time®. This reduces the time, cost and emotional energy for both sides that might otherwise arise in new court proceedings to resolve disputes. This may be beneficial where the paying spouse has wildly fluctuating commission or bonus income, lives far away, or in another country.

Where Divorce Structured Settlements Work Best

A divorce structured settlement works best if there is enough liquidity in divisible assets and/or the Paying Spouse has sufficient resources to fund a future payment stream for some element of the divorce today.
Where the Recipient Spouse would like the security of a stable income foundation that is unaffected by the Paying Spouse’s employment status, solvency or income reporting integrity. Customized reliable payment streams without the hassle.
However, where the value of less liquid assets, in the form of real estate or business investments, may be much greater than the combined value of the remaining property, a spouse wishing to keep the marital home or buy out the other partner’s business interest, for instance, may find a structured settlement to be an attractive option.
Where the number of future payments can be quantified at the time of settlement. One cannot, for example, quote a divorce structured settlement for a payment that may vary from one payment to the next or may otherwise vary over time.
Where the Recipient Spouse would like the security of core income stability that is unaffected by the death of the Paying Spouse.
Where the Paying Spouse and the Recipient Spouse want to keep things simple.

Summary of Benefits of Divorce Structured Settlements

Advantages to Receiving Spouse:

Security–no fear of broken promises of ex-spouse, or the attendant costs to enforce decree and equitable distribution or alimony payments are:

Contractually guaranteed stable income, funded with an annuity issued by an A.M. Best A+ (Superior) rated life insurer, Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, Inc., or an annuity or Funding Agreement Issued by American General Life Insurance Company or United States Life Insurance Company in the City of New York, A.M. Best ” A” rated life insurer subsidiaries of Corebridge Financial (formerly AIG Life & Retirement), Puritan Life, an A.M. Best B++ rated annuity issuer or, or Independent Life Insurance Company which holds NAIC Tier 1 ratings. See ratings here
Flexible plan designs and security allow for long term pay outs and multiple payment streams
The annuity that funds the obligation to pay the matrimonial structured settlement may be creditor proof (depends on your state)
Obligation assigned through non-qualified assignment process is not subject to future general creditors of ex-spouse
Alternate funding vehicles available.

Advantages to Paying Spouse:

Potential for savings in discounted cost of payments
Get the obligation to pay off the books, through
No lien on assets from promissory notes

Are Alimony and Maintenance Payments Deductible?

Beginning Jan. 1, 2019, alimony or separate maintenance payments are not deductible from the income of the payer spouse, or includable in the income of the receiving spouse, if made under a divorce or separation agreement executed after Dec. 31, 2018 . Note that this also applies to a divorce or separation agreement executed on or before Dec. 31, 2018, and modified after December 31, 2018, as long as the modification:

changes the terms of the alimony or separate maintenance payments; and
states that the alimony or separate maintenance payments are not deductible by the payer spouse or includable in the income of the receiving spouse.

On the other hand, generally alimony or separate maintenance payments are deductible from the income of the payer spouse and includable in the income of the receiving spouse, if made under a divorce or separation agreement executed on or before Dec. 31, 2018, even if the agreement was modified after December 31, 2018, so long as the modification is not one described in the preceding paragraph. [Source : Clarification of IRS Publication 5307, Tax Reform Basics for Individuals and Families for the repeal of deduction for alimony payments under the Tax Cuts & Jobs Act of 2017 as clarified and/or updated at IRS.gov February 8, 2022] Also see Topic no. 452, Alimony and separate maintenance | Internal Revenue Service last updated September 17, 2024]

Divorce Structured Settlements

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