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What are the advantages of lump-sum alimony?

On Behalf of | May 4, 2023 | Divorce Financial Planning |

Most people collect alimony – also known as spousal support – once a month. They view it similarly to child support, as their ex has been ordered to pay for a certain number of months after the couple’s divorce.

However, this is definitely not the only way to receive alimony. You could also receive it as a single lump sum at the time of the divorce, foregoing all payments in the future. What are some of the advantages of approaching alimony in this way?

Your ex’s financial future will no longer be your concern

One potential problem with alimony is if your ex’s financial circumstances may evolve. Say that they lose their job and suddenly can’t make the payments they agreed to. If you take the money all upfront, you won’t have to worry about this happening. You know that you’re going to be paid alimony, no matter what happens over the next few years.

You won’t have to cooperate with each other

Alimony can also be frustrating for some couples because they may need to keep communicating and cooperating for years after they split up. They would just rather have a clean break at the moment of the divorce. Lump sum alimony can allow you to address all mutual financial concerns at once so that the two of you won’t have to communicate again.

You can invest the money

From a strictly financial perspective, it could be argued that a lump sum can be much more lucrative than taking monthly payments. Technically, the money you’re paid is going to be the same, but getting it in advance allows you to invest it. You can also avoid the inflation that is going to happen in the coming years, which would devalue money that you would receive later in time. For both of these reasons, receiving a lump sum may mean that you get “more” money than you would have if you opted for monthly payments.

These are just a few things to keep in mind when considering your alimony options. Don’t hesitate to seek legal guidance as you’re assessing your options and formulating plans to protect your interests.