Is it better to take lump-sum alimony?

by | Apr 3, 2019 | Spousal Support

Lump-sum alimony can be a good choice for those who need money now, just as it’s a wise choice for those who don’t want to be tied down with monthly payments.

As someone who is receiving alimony, you may not like the idea of allowing your ex-spouse to pay you monthly support payments, because there’s always the risk that they won’t pay. The amount may also be small each month, even if it’s a large amount of money when all is said and done.

What are some benefits of taking lump-sum alimony payments?

There are a few benefits to taking a lump-sum payment. First, you might get more money than if you took monthly payments due to the potential for investment. Second, you don’t have to worry about your ex-spouse failing to make payments.

Are there any downsides to taking alimony in one lump sum?

There are a few negatives when it comes to taking a lump-sum payment. The major disadvantage is the tax consequences. You will have to pay taxes on the full amount that year, which could end up costing you more in taxes than if you take payments over time.

The other downside is that you do get the money all at once. If you’re not cautious about how you use it, it’s easier to spend a large amount of money all at once rather than receiving smaller amounts over time.

These are some things to think about if you’re seeking alimony. The right payment schedule for you could be a lump sum or monthly payout, depending on your circumstances.