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Can I Pay or Receive a Lump Sum Alimony in North Carolina?

Alimony payments are a frequent source of stress, frustration, and friction for many separated couples. While monthly payments are supposed to provide a stable source of income for the dependent spouse, they also often breed resentment—and if the supporting spouse gets behind on payments, you may need to get the court involved.

But while monthly alimony payments are by far the most common arrangement, they aren’t the only spousal support option for separated couples in North Carolina. In some cases, a lump sum payment might be a better alternative for both spouses.

To be clear, lump sum alimony is very rarely awarded by a judge, and it may not even be realistically possible for you. Such an arrangement usually requires a specific combination of circumstances to achieve. It is more likely to occur as part of a settlement agreement between the spouses. However, if these circumstances do apply to your situation, a lump sum alimony payment may be worth considering.

What Is a Lump Sum Alimony Payment?

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In most spousal support arrangements, the court sets a monthly amount that the paying spouse must pay their ex-spouse.  In North Carolina, this is known as either rehabilitative alimony (if the payments are set to expire after a fixed term) or permanent periodic alimony (if monthly installments are set to continue until either spouse dies or the receiving spouse remarries).

In a lump sum alimony arrangement—sometimes known as an alimony buyout—the supporting spouse’s entire alimony obligation is set at a total fixed amount to be paid, rather than a regularly recurring monthly payment.

In many cases, the entire obligation is paid out in one lump sum payment. However, lump sum alimony can also be paid in multiple installments, according to the timeline established in the agreement or court order. The key difference is that the total amount of the lump sum amount is fixed and cannot easily be changed or terminated, even if the spouse receiving alimony remarries or the spouse paying alimony dies.

Additionally, some or all the lump sum alimony obligation could be met by transferring real property owned by the paying spouse to the receiving spouse, in lieu of cash payments.

RELATED: How Long Do You Have to Pay Alimony in North Carolina?

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What Are the Advantages and Disadvantages of Lump Sum Alimony for the Dependent Spouse?

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From the perspective of the spouse receiving spousal support, a lump sum payout is often the ideal option (in the rare circumstances in which it is realistically available). This is true for many reasons, including:

  • Time value of money. A dollar you receive today is almost always more valuable than a dollar you might receive in the future. That’s not only because of inflation, but also because money you have now can be invested (or used to pay off debts) and used to gain additional earnings or reduce interest payments on a loan.
  • Cannot be changed. A lump sum payout is fixed regardless of whether you get remarried, get a higher paying job, or if your ex-spouse unexpectedly dies or falls on hard times while you would still otherwise be receiving monthly payments.
  • Certainty, simplicity, and closure. With monthly alimony installments, there’s always a risk that the payments will be late (or your ex-spouse will simply stop paying), or that your ex-spouse will request to change the monthly amount. This could lead to money troubles, time-consuming court actions, and more. But with a single or a few lump sum payments, both parties can quickly end any formal relationship and move on.

Keep in mind, though, that there are some potential dangers and downsides to lump sum alimony. Receiving a large, one-time payment might disqualify you from certain government assistance programs you might otherwise be eligible for.

You also need to be honest with yourself about whether you have the financial skills and discipline to handle a large transfer of cash or property responsibly. Alimony payments—whether periodic or lump sum—are meant in part to enable the economically disadvantaged spouse to maintain their marital standard of living. You don’t want to spend lavishly and quickly burn through a one-time spousal support payment.

If you feel that you would be tempted to overspend your lump sum alimony payout, a monthly alimony payment may be the safer and wiser choice.

What Are the Advantages and Disadvantages of Lump Sum Alimony for the Supporting Spouse?

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From the perspective of the person paying alimony, the benefits of a lump sum buyout are perhaps less attractive. A lot depends, however, on the supporting spouse’s financial means, as well as what they personally value.

Many of the same reasons that lump sum alimony is advantageous for the receiving spouse are obvious downsides for the paying spouse. If you pay it all up front rather than gradually over time, you pay the higher “present value” for that money and can’t invest it. You also can’t get your lump sum “refunded” if your former spouse remarries, gets a high paying job, or their circumstances change in other ways that would likely lower or even eliminate a monthly alimony payment. So, in the end, it’s very likely that a lump sum payment will cost you more.

There’s also the obvious fact that paying the equivalent of multiple years of alimony in just one or a few payments is extremely expensive and only an option for very wealthy individuals.

The main advantage, however, is simply being able to quickly and permanently sever ties with your former spouse and not have to worry about regular communication, monthly payments, or the risk of having to go back to court or be ordered to make higher alimony payments in the future. Additionally, a lump sum payment can be used as part of negotiations to make a lower lump sum payment when compared to the total amount that might be paid out over a multi-year term of alimony.

Separation is stressful, even in the best of circumstances, and divorces that start amicably often get messy when hashing out the divorce settlement agreement. For many people, the chance to make a clean break and move on with no lasting obligations is worth the likely extra cost.

RELATED: Who Gets Alimony in North Carolina and Why?

Is Lump Sum Alimony Even an Option for Me?

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Lump sum alimony is rare for many reasons. It’s not going to be an option in most situations.

The most straightforward way to get alimony as a lump sum is for both spouses to come to an agreement and memorialize the terms in a separation agreement. But this is much easier said than done. Even if the supporting spouse has the financial means to pay alimony in a lump sum, they may have no interest in doing so, or can’t agree on the amount.

A court might also order the supporting spouse to pay spousal support as lump sum if they have the means to do so, especially if the court feels that the spouse is likely to defy court orders or be unwilling (or even unable) to pay monthly installments in a timely fashion.

You can see why, for most separating couples, rehabilitative or permanent periodic alimony arrangements are often the only realistic solution. But if you feel lump sum alimony makes sense for your specific circumstances, it is worth discussing the matter further with a family law attorney, as well as a financial planner.

Myers Law Firm: Client-Focused Alimony Attorneys in Charlotte, NC

Alimony calculations are often extremely complex. Every separation is different, and under North Carolina law there are 16 separate factors that a judge must evaluate when determining the amount and duration of the payments.

If you have any questions about your alimony claim, or you believe that the current court order is unfair and should be changed, don’t wait any longer to speak to an experienced alimony attorney.

We understand how difficult and confusing the spousal support process can be, whether you’re the one making payments or the one receiving them. We are here to help you understand your options, be your strong ally and advocate as you navigate this challenging season of life, and help you arrive at a result that’s truly fair for all involved.

To schedule your initial consultation, please call our Charlotte office toll-free at 1-888-376-ATTY (2889) or fill out and submit our online contact form. We will follow up and get in touch with you as soon as possible.


N.C. General Statutes § 50-16.7 (2015)

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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