For some Illinois spouses, a divorce marks the end of a very tumultuous and stressful time. It’s easy to focus only on the finish line and make decisions that don’t benefit from a long-term point of view. But when considering matters of alimony, rash decisions can have lasting financial ramifications and should be avoided at all costs.
One of the most common alimony mistakes involves choosing a lump sum payment over smaller payments spread out over a long period of time. The motivation behind such a decision is often simply wanting to put the marriage in the past, even if that means taking a big financial hit up front. Some spouses believe they can “make up” the loss through earnings. But what if an unexpected job loss occurs or a business fails?
Another issue with lump sum alimony payments is the finality of the transaction. Most alimony agreements stipulate that the recipient is no longer entitled to spousal support if he or she remarries or begins cohabitating. In fact, many Illinois residents are able to legally cease paying alimony for those reasons. If a spouse has already paid a lump sum, however, there’s no going back to reclaim any of that money.
When considering alimony, Illinois spouses need to take a realistic and measured approach, one that isn’t guided by emotion. Yes, it may seem like just getting it over with might be worth it. But in the long run, a great deal of money can be lost by failing to focus on long-term financial matters.