Lump Sum Alimony

What is Lump Sum Alimony?

Lump sum alimony is characterized by an exact number and amount of payments without other limitations, conditions or statements of intent so that the amount of the award is not contingent on future events but rather is ascertainable at the time the divorce decree is entered. There are no provisions for termination, taxation or modification with lump sum alimony. Another term for lump sum alimony is “alimony in gross”. Lump sum alimony is in the nature of a final property settlement and such an award cannot be modified.

Is Lump Sum Alimony Right for Me?

It depends on each party’s financial circumstances.

Pros and Cons of Lump Sum Alimony

  • Pros: The recipient receives a definite lump sum of money from the payor spouse, a known sum which can not be modified.

  • Cons: Lump sum alimony can not be modified, so, as an example, if the payor spouse receives an enormous bonus after the divorce (and was not intentionally postponed until after the divorce) and after payment of the lump sum alimony, the recipient spouse has no access to that bonus.

How Does Lump Sum Alimony Differ From Other Types of Alimony?

Another type of alimony, periodic alimony, is characterized by an indefinite number of payments, making the actual amount to be paid also indefinite. There is also temporary alimony, which is a set timeframe for alimony to be paid. The court may modify an obligation to pay permanent alimony if the financial circumstances of the parties change substantially. Also, with periodic alimony, it terminates upon the death of either spouse or the remarriage of the recipient spouse unless otherwise expressly provided. Please note that “remarriage” has the potential to be broadly interpreted.