The Factors That Influence Lump-Sum Spousal Support Awards
Between divorced and separated couples, a spousal support order is usually structured so that one spouse will pay the other on an ongoing basis, often monthly and for a term of many years (at least until there is a material change that dictates that the order should be changed). In other words, spousal support is paid out over time, with periodic payments made in specified amounts on a regular basis. The majority of spousal support orders take this form.
However, courts have other payments structure options available to them. Somewhat less common is an award calling for a single, lump-sum payment, which is specifically authorized under section 33(9) of the Ontario Family Law Act.
In an Ontario Court of Appeal decision called Davis v. Crawford, the factors and principles that favour a court making (or not making) such an award were considered. As part of the overarching concern over whether the paying spouse can make a lump-sum payment without undermining his or her self-sufficiency, the court must consider (among other things):
• Both parties’ current assets and means;
• The assets and means they are likely to have in the future;
• The paying spouse’s capacity to provide support.
In Davis v. Crawford the Appeal Court emphasized that a court must weigh the perceived advantages of making the lump sum award being considered in the particular case against any presenting disadvantages of making such an order.
These can include:
• Whether, if the lump-sum award is ordered, the recipient spouse is unlikely to receive any equalization payment or child support payments to which she is entitled.
• Whether there will be any resulting disparity in the former spouses’ income, if the recipient spouse will not receive his or her share of the equalization payment (that otherwise represents the apportionment of the couples’ Net Family Property).
• Whether there will be a resulting inequity because the paying spouse will possibly be discharged from bankruptcy (and thus released from his or her equalization obligation, which was a topic I have written about previously [RA add link to prior article on bankruptcy])
For the full text of the decision, see:
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