Divorce structured settlements could be looked at as alimony insurance. A divorce structured settlement can provide assurance to the ex-spouse receiving child support obligations, alimony or division of marital property in the form of periodic paymentsthat will be received On Time Every Time®. This reduces the time, cost and emotional energy involved in new court proceedings to resolve disputes that may otherwise arise. This will be of particular interest where the paying spouse has wildly fluctuating commission or bonus income, lives a long distance away, or in another country.
A divorce structured settlement works best if there is enough liquidity in divisible assets and/or the Paying Spouse has sufficient resources to fund a future payment stream for some element of the divorce today;
Where the amount of future payments can be quantified at the time of settlement. One cannot for example quote a divorce structured settlement for a payment that may vary from one payment to the next, or may otherwise vary over time;
AND Where the Recipient Spouse would like the security of core income stability that is unaffected by the Paying Spouse's employment status, solvency or income reporting integrity.
Where the Recipient Spouse would like the security of core income stability that is unaffected by the death of the Paying Spouse;
Where the Paying Spouse and the Recipient Spouse want to keep things simple.
Summary of Benefits of Divorce Structured Settlements
Advantages to Receiving Spouse:
Security--no fear of broken promises of ex-spouse, or the attendant costs to enforce decree and alimony payments are:
contractually guaranteed and funded by an A.M. Best A (Excellent) rated life insurer which in turn is backed by Liberty Mutual, a company in business more than a century, 4th largest property casualty insurer in the USA and 76th in the Fortune 500.
Flexible plan designs and security allow for long term pay outs and multiple payment streams
The annuity that funds the obligation to pay the matrimonial structured settlement may be creditor proof (depends on your state)
Obligation assigned through non qualified assignment processis not subject to future general creditors of ex spouse
Advantages to Paying Spouse:
Potential for savings in discounted cost of payments