Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Why Lump Sum Spousal Support?

Why Lump Sum Spousal Support?

Mann Lawyers

Posted April 16, 2018

Both the Family Law Act in Ontario and the federal Divorce Act give the authority for judges to order periodic spousal support, lump sum spousal support, or both.

As pointed out in a recent post, periodic spousal support is tax efficient.   So why, then, would a lump sum support order be requested in a spousal support case?

Until 2011, lump sum spousal support awards were relatively rare.  That year, the Court of Appeal released the decision of Davis v. Crawford, which clarified that lump sum support awards did not need to be limited to cases where judges were concerned that the payor would default on periodic payments.

Davis has encouraged many recipients (and some payors) to request that support be made in lump sum format.  There are many advantages to lump sum payment.  From the recipient’s perspective, a lump sum payment means that there is no ongoing worry of enforcement and there is an ability to invest or make a capital expenditure.  For both parties, there is no need for ongoing interaction between them, and there is complete financial independence following the lump sum payment.  Both parties can then feel free to retire or reduce work hours without the worry of imputed income, or, conversely, earn more without the concern that this will impact support.

Davis sets out considerations for deciding if lump sum support is appropriate.   There must be an entitlement to spousal support – lump sum support should not be a property award disguised as support.  The payor’s ability to pay a lump sum must be considered.  The payor’s future financial self-sufficiency should not be jeopardized.    Judges should consider the benefits of terminating contact between spouses, avoiding risks of non-payment, while considering that lump sum support is not flexible in that neither party can return to court if their needs and means change in the future.

Once a judge completes this analysis, considerable deference is owed to the decision.   As one of many examples, see Zenteno v. Ticknor, heard shortly after Davis, where the Court of Appeal refuses to interfere with the judge’s decision to order lump sum support.

While lump sum support is certainly appropriate following many short term relationships with young spouses with no children, where the total quantum of support payable can be easily calculated, judges can also order lump sum support in long term marriages or with older spouses, provided that the appropriateness of such an order is properly analyzed, as set out in Davis.

This blog post was written by Mary Cybulski a member of the Family Law team.  She can be reached at 613-566-2073 or at mary.cybulski@mannlawyers.com.

More Resources

Blog |
Practice Management

By: 

Posted January 30, 2023

“If you don’t know, the thing to do is not to get scared, but to learn.”  Ayn Rand, Atlas Shrugged It is what it is[...]
Blog |
Family Law

By: 

Posted January 26, 2023

You have made the decision to separate from your partner. Now what? You have a house, a pension, maybe you have children, debts, and an[...]
Blog |
Environmental Law

By: 

Posted January 24, 2023

The Ontario government has moved ahead with changes to the Ontario Wetland Evaluation System in support of Bill 23, More Homes Built Faster Act, 2022. [...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted January 17, 2023

While each of these cases could have its own blog post, we have decided to create a list of important cases for employers to be[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted January 10, 2023

Constructive Dismissal is an incredibly important protection for Ontario employees – one that is often used successfully to enforce employment rights. If you ask members[...]
Blog |
Estate Litigation, Wills, Trusts and Estates

By: 

Posted January 4, 2023

Executing powers of attorney is an important component of estate planning and allows individuals to decide who will manage their affairs should they become incapable[...]

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.