You’re getting divorced, and your spouse is going to have to pay alimony, also known as spousal support. Perhaps you left the workforce to help raise a family, counting on your spouse to support you all financially. Since you’re losing that support in the divorce, they’re going to have to pay alimony for a set number of years, which can be determined by the court. You’ll likely be paid every month unless other arrangements are mutually agreed upon or ordered.
If you know that your spouse is fairly well off financially, you may want them to pay you the entire balance of the alimony upfront, and they may agree to do so. What are some of the benefits of using a lump sum alimony payment, rather than collecting on a monthly basis?
The money may be “worth” more
To determine a lump sum, you and your spouse can assess the total amount to be paid each month and the number of months for which it is to be paid. If you receive that total all at once, it may be worth more than it would have been had you received it via installments. Remember that issues with inflation can cause the value of every dollar to decrease over time. Additionally, receiving money upfront may give you the opportunity to invest it.
There are no concerns about future collections
Getting the money u front also means you won’t have to worry that your spouse will not pay in the future – or will not be able to. For example, perhaps your spouse is a high earner now, but you’re concerned about alimony payments if they were to lose their job in the next few years. They may be able to have the court order modified. But if you’ve already been paid, you’ll no longer have to worry about their ability to pay in the future.
This approach allows you both to move on
Finally, maybe you and your ex both just want to move on with your lives. Your children are grown up, so you’re not going to have to communicate about child custody issues or child support. You may both decide that it is beneficial to get all of the alimony payments out of the way at once so that you simply don’t have to communicate again and you can move on with your lives.
Divorce cases involving significant assets can certainly be complex. This is one of the reasons why it’s so important to understand all the legal options you have and what will work best in your situation. Working with an experienced legal professional can help to provide this clarity.