Lump Sum Settlements
A lump sum settlement is a one-time financial payment made by one spouse to the other as part of a divorce or financial settlement. It can be used to replace ongoing maintenance, equalise the division of assets, or enable a clean financial break between the parties.
Lump sum orders are often used when one party wishes to avoid future financial ties or where one has contributed significantly more to a shared asset, such as the family home. They may also form part of a broader financial remedy order or clean break agreement, offering both closure and clarity.
These settlements are typically tax-free but can have other financial implications—such as triggering capital gains tax or affecting entitlement to certain benefits—so it’s important to consider them carefully. They may be paid in a single amount or by installments, depending on the agreement or court order.
When well-structured, a lump sum provides both certainty and simplicity, helping both parties move on financially independently.
Frequently Asked Questions
It’s a one-off payment from one spouse to the other, used to resolve financial claims—often in place of regular maintenance or to balance the overall division of assets.
It’s ideal when one party wants a clean break, or when a fair adjustment is needed due to unequal contributions to property, pensions, or savings.
Yes. Once agreed or ordered by the court, a lump sum settlement typically prevents any further financial claims between the parties.
Choosing a one-time financial solution can bring lasting peace of mind. At AAGA Solicitors, we help you structure lump sum settlements that are transparent, fair, and legally robust—so you can move forward with clarity and confidence.