The traditional way to pay spousal support or alimony is by doing it monthly. This makes it similar to child support. If someone is ordered to pay $2,000 per month in spousal support, they write a check to their ex every month.
One alternative, though, is to take lump sum alimony. To do this, you have to factor the monthly obligation and multiply it by the number of months that it has to be paid. For instance, someone may be ordered to pay alimony for five years, or 60 months. At $2,000 per month, that would mean they could make a lump sum payment of $120,000.
Benefits and drawbacks
There are certainly some benefits to a lump sum payment. If couples have been experiencing a high level of conflict, they may not want to have any contact with each other after the divorce. A lump sum payment means they do not have to.
Additionally, if someone accepts a lump sum alimony payment, they get far more money at once. They may be able to invest it, for example, so that it will be worth more in five years than it would have been if they just accepted $2,000 every month.
The main drawback, though, is the expense. The other partner needs to have the financial ability to pay all of the alimony at once. Depending on how long it lasts and how much they were ordered to pay per month, this could be impractical. But for some wealthy couples, it may be very easy. So it all depends on the couple’s circumstances.
If you are going through a divorce and sorting out the details of alimony, take the time to carefully look into all of your legal options.