The idea of steady monthly income in the form of alimony payments is enticing to many going through a divorce. However, it may be better for some to take the lump payments if that option is available. What is best depends on the particulars of your situation, but here are a few of the positives of taking a lump sum alimony payments.
One of the main benefits to taking a lump sum for your alimony is that you have the money right then. When you are receiving monthly payments, there’s always the chance that the payor could lose one’s job or just quit making the payments. While the courts can take some enforcement measures if the payor gets significantly behind, the recovery process takes a great deal of time and energy on your part. Even then, there is no guarantee you will get the money.
Having the money in a lump sum also means you will likely end up with a better value than if you take monthly payments because of inflation. The general trend is that the cost of living and most services and goods continues to increase steadily, meaning that $500 now will go a lot farther than $500 20 years from now. Taking your alimony in a lump sum means you get the most worth even though it is equal to the same total.
If you are getting a significant amount of alimony, it may not be possible to take the lump sum payments, but it is worth talking to your attorney about the option. He or she can also answer any other questions you might have about the divorce and property division process in Texas.
Source: Findlaw, “Avoid Alimony Monthly Payment Programs,” accessed Feb. 12, 2016