Periodic basis
Start with the monthly support amount and expected duration that the lump sum would replace.
Net present value analysis
Translate periodic spousal support into a lump sum range.
Model the present value of future support while making the tax consequences, time value of money, and contingency assumptions visible.
Two perspectives, one analysis
Frame a settlement zone instead of relying on gross arithmetic.
A lump sum is not simply the monthly amount multiplied by the number of months. The NPV tool considers the periodic terms and relevant assumptions from both recipient and payor perspectives to help identify a settlement range.
- Nominal value of the periodic support stream.
- Time-value-of-money adjustment.
- Tax-effect analysis for recipient and payor.
- Contingency or mortality-risk adjustment.
Settlement zone: compare the recipient's floor and the payor's ceiling rather than presenting a single unsupported figure.
Assumptions made explicit
Understand how the future support stream is valued today.
The report separates the components of the analysis so the resulting range can be reviewed, discussed, and adjusted.
Tax consequences
Consider the difference between periodic support tax treatment and a non-periodic resolution.
Present value
Apply a discount rate to reflect that future payments do not have the same value as cash today.
Contingency risk
Include an explicit adjustment for the possibility that the full periodic stream would not be paid.
Set the terms
Enter the periodic amount, duration, dates, and parties for the support stream.
Review assumptions
Set the discount, tax, and contingency inputs used in the analysis.
Compare outcomes
Review the recipient floor, payor ceiling, and detailed NPV report.
Model a lump sum with the assumptions in view.
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