Often when one divorcing spouse agrees or is ordered to pay alimony to the other, the arrangement is a monthly payment over a specific time period or until something happens, like the spouse receiving alimony remarries or no longer financially requires it. However, what if your soon-to-be ex is in a financial position to make one lump-sum alimony payment to you? Should you take it?
The thought of receiving a large amount of money might be overwhelming — particularly if you aren’t experienced at budgeting and managing money. However, there are a number of reasons why a lump-sum payment is far better than monthly payments. Let’s look at a few of them.
Your ex could run into financial difficulties or just stop paying
They might be doing great now, but what happens if their business goes under, their investments take a nosedive, or their gambling addiction gets the better of them? Any of these things could cause monthly alimony payments to disappear.
Sometimes, people just decide their ex doesn’t need the money anymore and stop paying without going to court to make that case. Of course, this can land people in legal jeopardy — and jail. However, it happens all the time.
Your own financial fortunes improve
Maybe you thought it would take you years to get on your feet financially. However, you reconnect with an old college friend who offers you a partnership in their rapidly growing business. If you were receiving monthly alimony, your ex would have a case for ending or at least decreasing it. If you received a lump-sum payment, it’s yours to keep,
As noted, if a person who’s receiving alimony remarries, they are no longer required to receive it. However, if you got your alimony upfront in a lump sum, it remains yours. This means you don’t have to make what can sometimes be a difficult choice between marrying the person you love and continuing to receive what may be a significant amount of spousal support.
If your spouse is offering you the option of a lump-sum alimony payment (perhaps to help put the divorce behind them), it’s worthwhile to weigh the pros and cons. Discuss it with your attorney as well as a trusted financial professional.