3 Benefits Of A Lump Sum Alimony Agreement

3 Benefits Of A Lump Sum Alimony Agreement

by Dec 5, 2018Spousal Support

It’s not uncommon for alimony (aka spousal support) negotiations to engender some heated emotions during a divorce, and those feelings may not be gone once the divorce is final. The act of paying or receiving a monthly alimony check can be an unpleasant reminder of the divorce, and can create its own set of problems in the process. One alternative to this scenario is a lump sum alimony agreement, and it has several key benefits.

1) It Eliminates Month-To-Month Hassles

With a lump sum alimony agreement, there are no monthly payments. Ever. This means the person receiving payments doesn’t have to constantly worry about whether or not their ex spouse will make a payment on time, or at all.

It also eliminates what is sometimes a painful recurring reminder of the divorce itself. Writing and/or receiving an alimony check may surface feelings of anger, guilt, sadness, and other difficult emotions when the time to deal with it comes each month.

Finally, a lump sum agreement is great for couples that just want to move on with their lives and have complete separation. A monthly check means having to continue dealing with each other for an extended period of time after the marriage ends.

2) There Is No Possibility Of Alimony Reduction

Even if the paying spouse is one-hundred percent reliable and makes monthly payments on time month, there is still the possibility that the payments can be reduced or eliminated altogether down the road.

An alimony reduction may occur if there is a significant change in either spouse’s financial situation. For example:

If the paying spouse

  • Involuntarily loses their job or gets a pay cut
  • Has an illness or disability that prevents them from working

Or if the receiving spouse

  • Gets remarried
  • Begins cohabitation with a new partner
  • Has a significant increase in their personal income

With a lump sum alimony agreement, there is no possibility of an alimony reduction, because the whole amount is paid upfront.

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3) It Can Make Starting Over Easier

For the receiving spouse, a lump sum can provide some peace of mind. Not having to immediately worry about money right away can be a tremendous relief. Also, it may afford the opportunity to relocate, find a new house or apartment, get a new car, or any other big-ticket item that may be in need after the divorce.

For the financially savvy, a lump sum alimony payment may present an opportunity to invest that money and potentially generate greater returns than a monthly alimony agreement would have.

Lump Sum Alimony Agreement Drawbacks

There are some drawbacks to be aware of when considering a lump sum alimony agreement. First, there will be tax implications in taking a big payout upfront. Anyone opting for this alternative should consult with a financial professional beforehand to make sure they understand all the implications.

Second, while it may sound obvious, once the money is gone, there is no more alimony. By taking a lump sum alimony payment, the receiving spouse forfeits any and all claims to additional spousal support in the future. Those who are prone to impulsive financial decisions should take steps to safeguard the money they receive.

Discuss The Idea With Your Attorney

If you’re unsure what the best course of action is, you should discuss the relative merits of each type of alimony agreement with your lawyer.

At Vonder Haar Law, we have extensive experience negotiating all types of alimony agreements. What works well for some doesn’t for others, and we’ll communicate all the options to you. We’ll make recommendations, but our first priority is ensuring that your needs are met, regardless of the choice you make.


At Vonder Haar Law Offices, we offer every client a free phone consultation to discuss their unique situation and determine how we can help. To arrange a consultation, please fill out the adjacent form or call us at: (707) 529-3200.

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