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Lump-Sum Alimony


The primary goal of alimony in New Jersey is to help a financially dependent spouse continue living a life similar to the one he or she was living during the marriage. However, it is often hard to achieve that. Therefore, spousal support is usually awarded to dependent spouses to help them live lives close to the lives they were living in their marriages.

In most cases, New Jersey courts order payors to make alimony payments over a certain period. New Jersey judges generally don’t order lump-sum alimony payments. However, you and the other party are allowed to insert an amount in your Marital Settlement Agreement, which, once paid, will waive the receiving party’s future right to alimony and the payors’ future obligation to pay alimony. A settlement is generally the best option for you if you want to pay or receive spousal support as one single payment.

What Is Lump Sum Alimony?

Lump-sum alimony is also known as “alimony buyout.” Lump-sum alimony or alimony buyout is when a payor pays alimony to the recipient through a single payment instead of through periodic payments. Usually, payors can make lump sum alimony payments to receiving parties through cash payment or property division.

While negotiating alimony obligations, keep in mind that if you accept a lump sum alimony payment, the amount you receive may not be the same as the amount you would have received in the end had you settled for periodic payments. This is because several factors are considered during the calculation of lump-sum alimony payments. For example, if the dollar’s value is expected to reduce over time, the lump sum amount you receive today might be lower than the amount you would have received in the end had you settled for periodic payments.

Lump-Sum Alimony v. Periodic Alimony

The obvious difference between periodic and lump sum alimony is that lump sum alimony is paid through a single payment, and periodic alimony is paid over a period of time. Apart from this obvious reason, the two have other notable differences.

Firstly, periodic alimony is prone to future modifications, whereas lump sum alimony is not. Periodic alimony can be reduced, increased, or even terminated. On the other hand, lump-sum alimony cannot be reduced, increased, or terminated in the future. If you suspect that your soon-to-be-ex might not be able to meet his or her alimony obligations in the future, you might want to consider lump sum alimony. This is because, with periodic alimony, a future change in the payor’s income can mean a reduction in spousal support.

Secondly, unlike periodic alimony, when you accept lump-sum alimony, you don’t have to worry about the payor missing a payment or making late payments. Delayed or missed payments often lead to disagreements and litigation.

Lastly, with periodic alimony, recipients often feel worried about how cohabitation and remarriage will affect their alimony rights. That is because, with periodic alimony, cohabitation and remarriage are usually grounds for alimony  suspension, reduction and/or termination. On the other hand, lump-sum alimony remains unaffected even when a recipient remarries or begins cohabiting with another person.

Is Lump Sum Alimony Right for You?

Lump-sum alimony bears notable benefits, but it is not suitable for everyone. Before deciding whether or not to settle for lump sum alimony, discuss your case with a professional. If you are considering lump sum alimony, the experienced New Jersey family attorneys at Citizen Soldier Law can help you make the right decision. Reach out today to receive legal guidance.

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