Alimony: Lump sum or Monthly?

Alimony: Lump sum or Monthly?/Photo by Tima Miroshnichenko from Pexels

This question comes up a lot: When paying or receiving alimony, is it better to do a lump sum, or monthly?

That really depends on YOU.   For people with personalities like me, I prefer a Lump Sum (or Buyout).

Certainty

I like certainty.  Other then the occasional blackjack I play in Vegas (oh, and the Powerball lottery), I don’t like rolling the dice.

Alimony in lump sum is CERTAINTY.  You get it, all of it – up front.  Doesn’t matter if you’re remarried, dead, or someone loses a job.

No Modifications

One of the most annoying things about family law is the continuous litigation.  If you are paying/receiving monthly, and someone gets a job or a raise – OR someone loses a job, or gets demoted, there are changes in financial cirumstances that warrant modification.

With a lump sum – all future issues are squashed.

Remarriage is Ok!

Generally, if you are the supported spouse, and you remarry – alimony stops.  (not with child support).

Employment is Ok!

Sometimes people tend to malinger post-divorce, refusing to work because alimony is easier.

I love lump sum, because once you’re paid out, people actually WANT to better their lives and work.

“For even when we were with you, we gave you this rule: “The one who is unwilling to work shall not eat.” 2 Thessalonians 3:10

What is a Fair Amount for Lump Sum/Buy Out?

“Fair” is such a meaningless word in Family Law.  What is “fair” is entirely subjective to different people.  Some people don’t believe in alimony.  Others believe that one month of marriage entitle them to $10 trillion dollars.

Read Fairness in Divorce is Not About How Much You Get.

Factors To Consider

However, here is a helpful list of some of questions to consider when deciding whether or not to do an alimony buyout:

1. 1.  How much would monthly support be?
   2.  What is money up front worth to you? (If you can get get 1 year’s worth of monthly payments up front, how much less would you take?  What about 5 years?  10 years?)  This is also known as the time value of money.
   3. What is the anticipated rate of return?  (If you are receiving$5,000 per month, and you get 60k upfront and invest it in the stock market, are these returns worth receiving less upfront?)
   4. How close are either of your to retirement?
   5. Do either one of you have plans to remarry?
   6. What are the odds that spousal support would be modified in the future?
   7. How long would alimony be paid?
   8. Risk of unemployment/underemployment?
   9. Child raising duties?
   10. Does child support cover some expenses?
   11. Disability?
   12. What if someone dies early?
   13. What are both parties earning capacities?
   14. How much do you like certainty?
   15. What is it worth to you to NOT have to fight over it in the future?

Alimony: Lump sum or Monthly

@lawyerkelly Alimony #alimony #spousalsupport #divorceattorney #familylaw #divorcelawyer #divorcetips #SyncYourMiO ♬ Bad Infomercial (Long) – Mashcroft