The most common way that people get alimony after a divorce is through a monthly payment. Say that your spouse was the only working parent in your family. You need to help take care of the kids and it’s difficult to immediately re-enter the workforce. Your spouse may be ordered to pay alimony every month to help offset the costs.
One of the problems with this is that it simply means you have to stay in contact with your ex and depend on them for these payments in the future – perhaps for years. They may not want this either, so they may offer you a lump sum, where they pay you the projected total at the beginning. Should you consider something like this?
There are some major advantages
Taking a lump sum gives you the total amount that you would have been paid over the projected time, but you get it all at once. This can be beneficial because you know exactly how much money you have upfront, and you can plan and budget around it. You could also invest it and increase your wealth.
Furthermore, a lump sum also means that your spouse’s financial future doesn’t impact the payments. If they lost their job while making monthly payments, they wouldn’t be able to pay and they may be able to modify the order. If you take the lump sum, even if they lose their job in the future, you don’t have to give that money back.
Plus, of course, the lump sum just helps to put more distance between you and your ex if the two of you are not on the best of terms. If this is something you’re interested in, take the time to look into the legal steps that are necessary.