By Cordell & Cordell Divorce Lawyers
An alimony buyout, often referred to as lump sum alimony, is an upfront, one-time payment to the recipient party, which is less than the equivalent of the present day value of the payments over time.
In most cases, the interests of persons asked to pay spousal maintenance are better served by offering an immediate buyout of alimony in return for a waiver that would preclude the court from modifying spousal support in the future.
This buy-out may occur as part of a property settlement that favors the party seeking maintenance.
To determine what amount to offer or accept as an alimony buyout, it is important to consider the present value of the asset and the tax consequences.