When spousal maintenance (alimony) is approved in a divorce, most people picture monthly payments made from one spouse to the other. And for the most part, they are correct. But did you know there’s another option? Sometimes, alimony can be paid in one lump sum, offering both parties a quicker, cleaner financial break.
Would this approach work for you? Let’s explore how and when alimony can be paid in full.
Spousal Maintenance Can Be Paid in a Lump Sum
Alimony or spousal maintenance can be paid in a lump sum under certain circumstances. This type of payment is known as “lump-sum alimony” or “alimony in gross,” and it can be an attractive option for both the payer and the receiver. But every divorce is different. Whether alimony is paid as a one-time payment or in installments over time usually depends on the specific conditions of your divorce settlement and local laws.
For lump-sum alimony to be an option, both parties must agree to this arrangement, or a court must decide that it is appropriate based on the circumstances.
Lump-sum payments are typically considered when the payer has sufficient financial resources to pay upfront. In some cases, courts may order lump-sum alimony to settle a divorce quickly or when ongoing payments are impractical due to uncertainty about the payer’s future income or employment.
Advantages for the Receiver and Payer
The single payment allows the recipient immediate security. It also eliminates the anxiety of waiting each month for the check. In addition, a lump sum removes the uncertainty of whether or not your ex-spouse can hold a job. It’s also a hedge against a career-ending injury to the payer. The lump sum allows the receiver to get everything upfront and invest wisely.
A lump-sum payment for the payer can also be an appealing option. It provides them with finality—a clean break from the relationship. Once the payment is made, the payer’s obligation is fully satisfied.
The payer is free from any financial ties to the ex-spouse.
Before deciding, it’s wise to assess your situation and consult a local family law attorney and a financial advisor to ensure that a lump sum payment for spousal maintenance (alimony) is the right option for you.
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