Five Reasons Why You Should Request Alimony as a Lump Sum During Your Divorce

Gold BullionIf you are in a position to receive alimony as a part of your divorce, the settlement (or the judge) may specify exactly how much your ex-spouse is obligated to pay and over what time period. Normally, your ex would be required to send you a monthly alimony payment, but you can attempt to negotiate a lump sum payment as part of your settlement, usually in exchange for a lower overall payout. (Are you eligible for alimony after your divorce? Find out!)

Is it ever a good idea to try to receive your alimony payments as a single lump sum even if it means less money overall? The answer is yes! Here are five major reasons why:

1. Your Ex-spouse Could Lose His Job or Face Other Financial Difficulties

Your ex can only pay you alimony if he can afford it. These days, no job is certain, and if your ex loses his job (and therefore his income), he can go back to court and ask a judge to lower or even eliminate his alimony obligations altogether. It’s not just your ex-spouse’s job you have to worry about. If he faces any financial difficulties, he can use this to convince a judge that he can’t afford alimony. If he gets sick and faces high medical bills, or if he remarries and has to support his new family, you could find that your monthly alimony checks disappear!

2. You Could Get a Job

If you took care of the home and/or children before your divorce, you may have a very strong case for requesting alimony from your ex-spouse. However, if your ex can convince a judge that you no longer need his alimony payments to support yourself, you could lose that helpful monthly payment. That means that if you get a job or start earning income by other means after your divorce, you could be sacrificing your alimony.

3.  You Could Get Remarried

As soon as you remarry, your ex-spouse is no longer required to pay you any remaining alimony. Imagine if you meet someone special and want to join your life together with his. Now, you have to make the choice of whether you want to lose out on alimony payments or wait until the alimony period lapses before walking down the aisle again. If you take the alimony payments in a lump sum, you won’t get trapped in this difficult conundrum.

4. Your Ex-Spouse Could Just Stop Paying

The beauty of accepting a lump sum alimony payment is that you will have the security of knowing that you received the full amount of the payment, even if the overall amount is less than you would have received if you had taken monthly payments. This security is important, because you can’t control your ex or his circumstances. He can decide for any reason at any time to stop paying your alimony. Sure, you can take him to court and try to force him to pay, but imagine the hassle, stress, and expense of that!

5. You Can Use a Lump Sum to Buy Out Your Ex-Spouse’s Share of Your Home

If you want to stay in your home and your ex-spouse agrees to leave, you will need to find a way to buy him out of his share of the home’s equity. Let’s say that you have $80,000 worth of equity in your home, but you don’t exactly have the $40,000 you need to buy your ex out just sitting around in your bank account. What to do? One option is to apply the full amount of your ex-spouse’s alimony obligations against what you owe him for the house. For example, if his alimony obligation is $30,000 to you, then if he agrees, you can apply that toward the $40,000 you need to buy out his equity in your home. Now, you just have to find $10,000 on your own! (Learn other ways to keep your house during a divorce.)

If your mother ever told you that “One in the hand is worth two in the bush,” she might have been onto something! Consider asking for your alimony payments as a lump sum during your divorce negotiations. At least you’ll have your money in hand, and if you don’t need it right away, you could even invest it so that it can grow for you over time!

If you are asking for a lump sum, you’ll probably want to seek professional advice to determine the amount you should ask for.

Want even more useful divorce advice? We invite you to explore our divorce article archive and to sign up for a Second Saturday Divorce Workshop. Check to find the nearest workshop in your area.

40 thoughts on “Five Reasons Why You Should Request Alimony as a Lump Sum During Your Divorce”

  1. I am in a cohabitation arrangement. We broke up about two months ago. He has cut off all communication with me. I don’t want to be mean but I got my own place and will be moving in on the 6th of September. What do I have a right to take? We have purchased all of our housewares together like dishes and the Keurig, lawn furniture. We both bought stuff here and there. Do I have a right to take anything? He actually said I only have my clothes but it’s not true! I don’t want anymore unnecessary drama. I can’t see myself moving into my new place without the silverware I chose. It may seem futile but it’s been very nerve wracking.

  2. Anything under $500 in theory you can just take. That’s what I did. I took 95% of the kitchen stuff. I left enough plates, silverware, a few drink glassware and anyhting we had extra off like cutting boards. I would take all the furniture – you should leave a little.

  3. Although my soon to be ex-husband makes a large amount of money, we have few assets, monetarily or otherwise. However, we have a substantial retirement. Would it be wise to settle for a lump sum in the form of retirement, and then cash out the portion that I need for living expenses? I think that I can withdraw from retirement at the time of divorce without penalty?

    Thanks in advance for any advice you can offer.

    1. If the retirement funds are in his name, you will need a Qualified Domestic Relations Order to transfer the funds to an IRA in your name. You can ask that a portion of the funds be paid directly to you rather than going into your IRA, and you will have to pay tax on those funds, though there is no penalty.

  4. Kellie McDowell, CFA, CDFA

    Just be aware that on the lump sum payment that you can affect the deductibility of the spousal support if the payments drop by more than $15,000 during the first three years. I think a one time payment will trigger recapture for the payor.

    1. Kellie is right regarding lump sum payments of taxable/deductible alimony. That is why we usually structure such payments as non-taxable/non-deductible alimony payments, so that he doesn’t get a deduction and you don’t pay tax. That way there is no “recapture” issue.

  5. I have been married for 33 years it has been a bad marriage for many years. I stay because I depend in my husbands checks . I am a stay at home mom. do to not being able to work out side the house. I do daycare but if I was to leave I would have to start over. I don’t make much. And he carries all are insurance and children are grown but still live with us and go to school. my husband would quit his job if I was to leave and we would have nothing what am I to do

  6. Kathy J Cohen

    I owned a mobile home and he was buying land. We married n he was sole provider. We put in septic electric well n concrete pad. We then put my home there. Now a divorce. He’s self employed n works cash deals and hides his money at his mother’s. He’s been abusive but he filed. There is an order of protection. Land has two separate addresses. He has a pole barn on one lot my home on other. It appears we will be going to trial. He wants me to move but doesn’t want to pay. I have no income and haven’t in the whole marriage. My attorney asked for $23,000 and 6mo spousal support. He turned it down. Pretends he has no money. What will judge Grant?

      1. What is the point of this Q&A section ? Most of us come here for advice because we don’t have a lot of money to talk to an attorney. Every damn answer is talk to your attorney it doesn’t take a rocket scientist to figure out that some of us don’t have $200 to $300.00 an hr.

        1. The point of these articles is to give you general financial advice around topics of interest to you. When people ask for specific legal advice, often unrelated to the content of the article, I have no choice but to tell them they should talk to an attorney or other divorce professional familiar with the law in their state. Would you rather I guess at what the law might be and make up some answer that you want to hear? I mean, you could do that for yourself, you are as qualified as I am, since I am not an attorney. I don’t know the law in your state and am not qualified to give you legal advice, and it would be irresponsible for me to make something up.

  7. I have married my spouse last year, but due to some differences we would like to get separated. Is it compulsory that i should pay alimony? If my wife says that she does not require it, can the court consider it?

    1. Contact an attorney to find out what the laws are in your state. It is doubtful you would be on the hook for alimony for very long in such a short marriage. And of course, if she waives alimony, then it isn’t an issue.

  8. Been married five years with a one year old. We own a house both name on the deed and mortgage. We wants me to leave. I’m not leaving without my son. Should I stay until we see attorneys? I have a full time job but he makes much more money and pays the mortgage and car note. Advise?

  9. My x and I agreed to sell the house which should end up with $200k in equity to split 50/50. In determining Alimony need could I argue that the $100k in equity she is getting should be considered? Whats the need for her if she has 100k in the bank? I was hoping to use this like a lump sum payout for at least partial alimony.

    1. It sounds as though the house belongs to both of you, so you are each getting your half. Certainly if you are giving her your half of the equity as well, you could count that as a lump sum alimony payout. But if she’s just getting half, that’s what she owns as property. To the extent that those funds are available to invest, the earnings from them would be counted as funds she has to support herself, but I doubt the funds themselves would be counted.

  10. So I have been married for 7 years almost 8 and we have been separated since Jan 1,2018. He is a veteran of the United States army. He is duly disabled on the va side I need some advice as to what to do

  11. I have been divorced for two years.My ex husband was ordered to pay Maintanance for a total of 17 years in a two tier payment plan. one year after the divorce he took me back to court to try to get the payments lowered. We settled on 13 years. Now he has gone through the process of saying that he cant’t work anymore because of arthritis. He is 44, and told the judge that he was in good health two years ago. I have video of him f=running across a golf course frm less then a year ago. I also have proof that he has been planning this for over a year. What can I do to to make him pay his obligations?

  12. I would like to make a settlement offer of part monthly alimony and part lump sum payment in lieu of reducing the time he pays alimony, which is attractive to him. If the lump sum is paid in two parts on two future dates, 18 month and 27 months, respectively; will I lose those lump sum payments (like regular alimony) if I were to remarry before receiving the payments?

  13. How can I best word my proposition to my ex husband on this issue?
    The past 4 years he’s paid child support and spousal support through the state. Now the child is 18, so he has just spousal support for the next 4 years. I’ve already had to hire an attorney to contact him when he wasn’t paying on time after the child support ended. He will never go for a lump sum payoff if he thinks it may benefit me, so what can I propose to him that will help to sway his decision?

    1. Does he have a pile of cash lying around in an account that he could use to pay you? If not, there’s nothing that you can do to convince him, since he doesn’t have the means to pay you. If he does have funds available, then figure out what his hot buttons are around alimony. He just hates writing out that check every month? Here’s a way he won’t have to. He thinks you are getting too much? A lump sum up front is generally less than the total of the remaining payments.

  14. My husband has been paying his ex-wife alimony on a 17 year marriage. It is now exactly 17 years that he has been paying alimony – more than half of their long term marriage. When they got divorced, neither parties were legally represented and instead went through a mediator to help w the divorce and alimony paperwork. Bad decision, I know. Divorce paperwork has no end date indicated for the alimony. There is though the “Gavron Warning” but ex-wife has done nothing to our knowledge to improve her situation. She is 57 years old and we are concerned that she would play the health card should we take her back to court. We attempted this 5 years ago but were able to work things out outside of the court to reduce the payments by $500 from $1795 to $1295 in fear that the judge would see her and take pitty on her. Ideally, we would like to have this alimony line item eliminated from our finances once and for all. We heard from family members that ex-wife is living at the Salvation Army after couch-hopping and damaging countless other living situations w now former friends. We see this as an opportunity to hang a carrot over her head with an alimony lump sum buyout and terminate the alimony payments. I understand that each state has different laws that apply and that you cannot offer official legal advice. However, can you offer your thoughts and opinions on what might be possible challenges for us in offering alimony lump sum buyout to ex-wife? What do you think would be the recommended steps to have this done? And what do you think would be sufficient amount (say maybe 20 months worth)?

    1. The challenge is coming up with a lump sum that he is willing to offer and she is willing to accept. Your other choice is to take her back to court saying that sufficient time has passed for her to become more self-supporting. I would think she’d rather accept a lump sum than go through a prolonged court case, that would likely be followed in the future by another rematch. That said, I doubt the court would be willing to leave her without means of support if he has the ability to pay support, so keep that in mind.

  15. We were married for 15 years. By law, he needs to pay 7 years of alimony. Our marital home is “underwater” we owe $350,000 and it is worth $320,000. We have a boat (some equity) and a truck (fully paid off) under both of our names. We also own a property that we are still in the process of building a house. There is a loan of $450,00 to build a house (almost complete) on the lot/property and the value is undetermined with this “new economic” crisis. He makes 70% than I do. He has also had cancer and beat it … twice. He drinks and smokes … I am concerned about him keeping his job and maintaining his health. With all of this debt under both of our names, does it make sense to ask for a lump sum alimony? or monthly payments? Is it possible to ask for a “partial” lump sum… one or two years as well as monthly payments? What is your financial advice in this situation?

    1. The house has no equity, there’s a boat with a little equity and a truck to drive. You are building a home on which you owe a lot of money, it isn’t complete, and you likely couldn’t sell it in its current condition, not to mention the condition of the real estate market. So sure, you can ask for a lump sum payment, but unless he has a printing press in the basement, I don’t see where he’s going to get the money to pay you.

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  17. Hi Ginita, great article, thanks for taking the time to write it. One question about the Lump Sum option for Spousal Support. My wife and I are married for 11 years in California, and we’re both seriously considering to divorce. Due to the difference in our income I’ll very likely to be required to give her spousal support. Since we’ve been married for 11 years, there won’t be a predetermined time for the support, right? In this case, do we still have the option to agree on a Lump Sum amount instead of monthly payments? Would the court accept that if we both agree that we want to settle the Spousal Support as a one time Lump Sum payment? Thank you!

  18. Terri A Oetinger

    My husband has agreed to lump sum alimony payment. Looking at taxes requirements we cannot share a residence to be considered money for alimony. Does this mean at the time the divorce is settled or when we file this years (year of divorce) taxes? We are currently staying in the same home and dismantling a 45 acre farm. This is including equipment, cattle and the such. We are sleeping in different rooms. One of us will stay until property is sold, the other will leave sometime in the next couple of months after all the work is done to dismantle things.

    1. There are several reasons you should not be concerned about that: First of all, that rule only applies to alimony payments made more than 30 days after divorce is final, and it sounds like your payment may be made sooner than that. Secondly, that rule only pertains to tax-deductible/taxable alimony payments made pursuant to pre-2019 support agreements, and it sounds like your divorce negotiations are more recent than that. Third, even if the support were pursuant to a pre-2019 agreement, we generally characterize lump sum payments as non-taxable/non-deductible in the agreement to keep from running afoul of the three-year recapture rules. So what you are worrying yourself with is a rule that doesn’t apply to your situation at all.

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