Lump Sum Alimony in Mississippi
Is it alimony or a property settlement?
The second type of alimony in Mississippi is lump sum alimony. However, it is really not alimony in the traditional sense. Rather, it is better to describe lump sum alimony as a cash equalizer. According to the Mississippi Supreme Court, it is a tool to be used in dividing property.
To differentiate it from periodic alimony, lump sum alimony is more akin to a property settlement. It may not be modified absent fraud. If the payor dies before the amount is paid, it becomes the obligation of the payor’s estate. It is not taxable to the recipient. Finally, it can be paid all at once or the court can order it be paid over time in installments. So how is it used?
Remembering back to my post on equitable distribution, there are times after dividing the marital assets, an inequity still exists between the spouses due to one spouse having considerable assets in their name. To remedy the inequity, the court can award the other spouse lump sum alimony in an effort to effect an equitable distribution of the marital estate. Thus, lump sum alimony is an “equitable distribution in the form of lump sum cash, rather than an equitable portion of certain property which cannot be divided equitably.” Haney v. Haney.
Since 1988, the four part test for awarding lump sum alimony was known as the Cheatham factors. The factors were:
- Substantial contribution to the accumulation of the total wealth of the paying spouse either by quitting a job to become a housewife or by assisting in the paying spouse’s business;
- A long marriage;
- Where recipient spouse has no separate income or the separate estate is meager by comparison; and
- Without a lump sum award the receiving spouse would lack any financial security.
Cheatham v. Cheatham, 537 So.2d 435, 438 (Miss. 1988). However, in July of 2007, the Mississippi Supreme Court held that when a court is considering an award of lump sum alimony, it should now just use the Ferguson factors, which are used in determining the equitable distribution of the marital estate, given the Cheatham factors are subsumed within the Ferguson factors. Yelverton v. Yelverton. For a discussion of the Ferguson factors, see my previous post on equitable distribution of the marital estate.
Thus, if there is still an inequity after the marital estate has been divided, the chancellor can apply the Ferguson factors to determine if lump sum alimony is appropriate. In my next post, I will discuss the third form of alimony in Mississippi—rehabilitative alimony.
