Alimony vs. Property Settlement: Is There a Difference?
Navigating the legal aspects of a divorce can be both overwhelming and confusing, especially since going through a divorce is often an emotionally challenging experience. However, you have to think clearly and make financial decisions that will impact your quality of life for years to come.
One important distinction is the difference between alimony and property settlement. Knowing this difference and how each one can impact your finances will help you make smart decisions during the divorce process.
What Is Alimony?
Alimony is a support payment paid by one spouse to the other. Usually, alimony only factors into a divorce if one spouse has historically supported the other financially. If both spouses worked throughout the marriage, alimony usually doesn’t factor in unless one spouse had a significantly higher income than the other.
Suppose that your spouse paid the bills while you ran the household throughout your marriage. In such a case, alimony would be a central consideration in your divorce. Alimony can be set for a certain amount of time or permanently. Factors like age, health, earning ability, and the length of the marriage are all considered when alimony payments are determined.
If you qualify for alimony, you might also have the option of choosing between a single lump sum payment or smaller, ongoing payments.
What Is a Divorce Property Settlement?
Most assets acquired by either spouse during a divorce are considered joint marital property. For example, one spouse might own a property, and the deed is in their name alone. In that instance, the court will likely determine that the property belongs to both spouses if it was purchased during their marriage.
Property settlement during a divorce is the process of deciding how marital assets are split between spouses. In this context, property refers to things like:
- Real estate
- Bank account holdings
- Items of value
Property settlement can happen either through mediation or in court. If the divorcing spouses can agree on how marital property should be divided in a divorce, mediation is usually the simpler and more cost-effective approach. If spouses can’t agree, they’ll need to go to court for a judge’s ruling on their property settlement.
The Connection Between Alimony and Property Settlement
On the surface, alimony and property settlement cover two different areas of a divorce settlement. Alimony is concerned with how much financial support one spouse owes the other, while property settlement relates to how the spouses should divide up their shared assets.
While these are two separate categories, they are related in an important way. Spouses can use alimony or property to negotiate. For example, a spouse wanting to keep the family home might agree to a much smaller alimony payment or none at all in exchange for a greater portion of the marital property.
Before agreeing to such an arrangement, it’s important to consider the long-term impact on your finances. For example, you might wait to give up alimony in exchange for a home until you can afford the taxes and other living expenses.
Get Help With Your Michigan Divorce Settlement
Gucciardo Family Law represents clients going through divorce in the greater Detroit metro area. Give us a call today to learn more about how an experienced Detroit divorce attorney can help with your divorce.
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