What is a "lump sum" settlement?
A lump sum is a large, fixed payment comprising of all of the alimony. Lump sum alimony is often provided instead of a property settlement when there is little or no property to divide.
Lump sum alimony is unusual in that it is payable even if certain events occur that would normally cause the cessation of alimony, such as remarriage. Since lump sum alimony is in lieu of a property settlement or reimbursement alimony, the present or future status of the recipient does not affect the alimony. Lump sum can even be made payable to the estate of the recipient, should he or she die, if the alimony agreement so states.
A lumps sum settlement on alimony is often less than what the receiving spouse would be paid over a longer period of time. The lump sum settlement is more enticing to the receiving spouse and in negotiation that carries a price along with it. This type of alimony agreement also provides stability for the receiving spouse. Financially it may not be the best choice, but emotionally it will allow the receiving spouse to live in a way that he or she does not have to rely on an ex-spouse in the future.