Divorce Explored: What to Know About Lump Sum Alimony Buyouts
Description
Should you take the lump sum or stick with monthly support payments? In this episode, Catherine and Karen unpack one of the most misunderstood yet consequential decisions in divorce: alimony buyouts. Together, they demystify how these lump sum payments are calculated, who truly benefits, and what hidden pitfalls can jeopardize your financial future.
From passive income projections to payout timing and mortgage qualification hurdles—this deep dive explores the real-world scenarios and tough questions you must ask before signing your agreement.
Lump Sum Alimony: Pros & cons for both payer and recipient
Tax implications & investment risks
Liquidity vs. long-term cash flow
Calculating present value & discount rates
Passive income assumptions—and why timing matters
What if the payer can’t pay all at once? Tranches, step-down payments, and protective clauses
Impact on mortgage eligibility
The role of life insurance and estate protection
Why enforceability & agreement language matter
The crucial importance of stress-testing financial plans
Listener Challenge:
Are you considering a lump sum offer? Screenshot this episode and send it to a friend or family member who might be weighing the same decision. Share the clarity.
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