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Why certain women are better off with lump sum alimony versus permanent periodic alimony

I provided a second opinion recently, reviewing a settlement proposal that a divorcing wife was hesitant to execute.  She was married to a high income professional and was being offered significant lump sum alimony.  For most women permanent periodic alimony is vastly preferable over lump sum alimony, especially for women who perceive themselves as too old to develop a career or who are already fully employed and need permanent alimony to supplement their wages.  However for this woman the lump sum alimony offer, while somewhat risky, was eminently sensible.  This got me thinking about the combination of circumstances she presented that made lump sum alimony potentially preferable to an equal monthly amount of permanent periodic alimony.

In this case, the woman was relatively young, well educated but without much work experience, and quite attractive.  It was this combination that made lump sum alimony appealing.  To understand why, we engaged in a thought experiment of what her life might be like with a similar amount of permanent periodic alimony.

In such a scenario both ambition and romance could be damaging to this woman’s lifestyle.  If she finds employment she is passionate about and starts earning good money, her ex-husband would likely take her back to court to reduce or eliminate her alimony.   If she dates someone, falls in love and decides to marry, or even just cohabit, her alimony is gone.  If she received permanent periodic alimony in the same amount as the monthly lump sum payment she was being offered, any new husband would have to bring in $100,000 a year over what he needed to support himself for her to maintain the same lifestyle.  Few folks expect their lifestyle to seriously diminish after they marry; most expect the reduced expenses from combining two households into one to actually increase their lifestyle.  With an award of permanent periodic alimony, this woman would either have to limit her dating to men making well over $150,000 a year or expect a reduction in her lifestyle if she fell in love and decided to marry.  The end result of a permanent periodic alimony award is that she would be much less likely to marry, or even pursue romance that could lead to marriage.  With lump sum alimony she can pursue love and career with no risk to her alimony.

I have seen a handful of cases in which women had been receiving significant permanent periodic alimony ($2,500 a month or more) for five years or more and the results, with one exception, were not pretty.  The situation was almost a mirror image of Dorian Gray: these women aged but their lives never moved forward. At most they dabbled in work but never really developed a passion in their employment.  They might date but rarely dated seriously.  Instead, they remained dependant upon a man who no longer loved them, and any time their alimony was late their lives went into crises mode. I am sure they thought they were coming out great when they “took” their husbands for significant permanent periodic alimony, but years later none of them appeared happy or even adult.  Sigmund Freud wrote that “[l]ove and work… work and love, that’s all there is” and “[l]ove and work are the cornerstones of our humanness.” These women could pursue neither; they were literally horrifying in the same way that Dorian Gray was horrifying.

The one exception was possibly my all-time favorite client.  Years after her divorce, I assisted her in collecting part of her equitable distribution award from her ex-husband.  Since her divorce she had pursued a career, which provided her satisfaction and a reasonable income and gave her days structure.  She also pursued romance.  Shortly after we completed her case she married a man she had been dating.  If I had to bet on any of my clients’ marriages being a happy one, I would bet on hers.  She had used her permanent periodic alimony award as a bridge to a more fulfilling life instead of as a chain to an unhappy life.

I finished providing my second opinion by warning this woman that if she accepted lump sum alimony she should reduce her lifestyle and save as much of her alimony as she could, and use the period she was receiving this alimony to find and pursue employment that pleased her and to pursue romance if it interested her.  For women who are truly interested in pursuing career and romance after divorce, permanent periodic alimony can be a trap best avoided by negotiating for lump sum alimony instead.

  • Well said, Greg. I agree with your analysis. I do have to point out, however, that the same would apply to a male client who had married a high earning wife. Granted, it is less frequent a situation. But it’s out there.

    • MJ-

      As someone who’s noted my great regret that our generation has not developed greater fluidity in gender roles, I hope you’re right but I am not hopeful. In my 17 years of doing family law, I have yet to get a husband permanent periodic alimony or even six-figure lump sum alimony. Often my husband-clients don’t want it. I have a current case that would appear close to perfect for such a claim–wife with $100k+ income leaves husband of eleven years who makes a third as much for another man; husband did bulk of child rearing because wife’s job involved frequent overnight travel–but he is satisfied with modest lump sum alimony.

      The few cases I’ve had with mothers/wives who were hard chargers in their careers involved husbands whose careers were more modest, rather than husbands who stayed home. Most hard-charging women still want husbands with some career ambition. While I’d love to see highly successful women choosing husbands for their homemaking abilities, I don’t believe our culture is there yet and don’t expect to see it get there in my lifetime.

  • I think a lot of men don’t pursue alimony out of embarrassment. But that is just my opinion.

  • California Observer

    When I (male) divorced, I pursued lump-sum alimony out of fear that my ex might otherwise bleed me until the end of my life (in California, alimony from long-term marriages can last forever in case of “need” like disability). Now I’m free and clear, both psychologically and financially…no regrets.

  • Liz

    This is the position I’m arriving at in my divorce, although I am in my mid-fifties and gave up career to raise children in an 20-year marriage. How does one structure a lump sum alimony proposal to the best advantage of each party? I imagine there are tax consequences for the one not paying traditional alimony, is this true? Mostly, how can I make such a proposal appealing to my ex….our finances are not very liquid, as most are invested in real estate. Thanks!

  • Lynn

    I am considering lump sum alimony too. After 30+ years of marriage, we are going through a divorce. I was home with children for many years, and make about 60% less than my spouse. I am 56, he is 58 and a 40 year smoker. I am entitled to 10 years of alimony, but I don’t trust he will either hold his job or live that long. I would rather take the money, invest it, and not have to have those ties to him. I have a friend whose ex lost his job, and now she is back in court trying to obtain a new support payments. I really don’t want to have to worry about my ex’s job or health, nor maintainig an insurance policy on him in case he were to die before I received all of the alimony. I know the policy would cost in excess of $2000 a year because of his smoking, and it seems burdensome. My attorney seems inclinded to push the alimony, but I am not sure why. Your thoughts are appreciated.

  • Ronda

    I am divorcing after 22 years of marriage. I stayed home and home schooled our 2 children. My soon to be ex works 2 jobs and makes $150,000 per year. I haven’t worked in 19 years. I have a job interview that would be a great opportunity for moving forward probably making more than I thought I would. Am I being greedy to not want to start a new job until we settle? Will this job affect my ability to get a good alimony settlement?

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