Typically, alimony (also known as “spousal support”) is paid monthly over a period of time. Generally, the purpose of alimony is to help the spouse with less income or a lower earning capacity maintain a standard of living that is comparable to that of the marriage, have some financial stability for a time while they get back into the job market, or until certain life events are reached.
Here in Virginia, the duration and the amount of support are dependent upon a number of factors related to the spouses and the marriage itself. Of course, divorcing couples can negotiate their own alimony arrangement with the help of their attorneys.
Most spouses aren’t in a position financially to pay the full amount of alimony they owe in one lump sum. However, if your spouse is able to do so, could that option be better than periodic payments? An alternate potential option is to provide a combination of a lump-sum as well as regular monthly payments for a duration of time.
Possible advantages of a lump-sum payment
First, you don’t risk having your payments decreased or losing them completely if you get a job or remarry, simply because you already have the money. You also don’t risk losing your alimony if your spouse encounters a significant adverse financial event like a job loss, the loss of their business or a bad investment.
If you want to buy out your spouse’s share of your home, vacation property or any other high-value marital assets, you will have the funds to do so. However, you don’t want to spend the entire amount on that unless you’ve got enough money left over to live comfortably.
When is a lump-sum payment not a wise idea?
Ask yourself some tough questions. If you receive a substantial amount of money, can you invest it wisely? If you have a habit of running up credit cards or buying on impulse, having access to this much money at once may not be a good idea, even if it means you’ll never have to deal with your soon-to-be-ex again.
If a lump-sum alimony payment is an option, it’s best to talk over the pros and cons with your family law attorney as well as trusted financial and tax advisors. In high-asset divorces, it’s wise to consider all the options you may have available.