What Should You Do With Your Alimony Money?
If you receive a favorable outcome in your divorce and walk away with a considerable amount of money in an alimony award, you might be wondering what to do with these funds. Perhaps you’ve never had this kind of money before in your life. Maybe your former spouse was the one who managed the money during your marriage. Whatever the case may be, you might be facing a major financial decision that you’ve never encountered before. So how should you invest your alimony money?
Pay Down Your Debts
There might be many possibilities awaiting you with your new alimony award, but you should start with the basics. Sure, paying off your debts might not be the most exciting thing in the world – but it’s definitely something you should do first and foremost. This applies especially to outstanding legal fees you might have.
You might also want to set aside some of your alimony money for any taxable transactions that could be triggered in the future. Speak to your divorce attorney about what might be considered “income” in the eyes of the IRS, because you might be surprised at the answer. For example, selling a piece of real estate that you received in a divorce settlement could trigger significant taxes.
Investing for the Future
Speak to a financial advisor if you’d like to explore various investing options for your alimony award. These options might include:
- A 529 savings account for college tuition
- A health savings account
- Mutual funds
- Custodial brokerage accounts (UGMA or UTMA)
- A mortgage on a new piece of property
An Example of How A Well-Known Celebrity Used Her Alimony Money
If you’d like to take some inspiration from a real celebrity wife, consider the investments Elin Nordegen made after she divorced Tiger Woods. This woman famously received a staggering $100 million as alimony. While you might not have received such a staggering sum, you can gain inspiration from the way Nordegen invested her money wisely.
She allegedly used part of her alimony to build a mansion in North Palm Beach, Florida. However, she eventually sold her home in 2020 – probably earning a significant profit in the process. Remember, Nordegen earned a 3.96 GPA while studying psychology, so she probably knows how to invest in real estate to a somewhat intelligent degree. At the very least, she knows how to take advice from legitimate financial experts.
After selling her home, Elin purchased another property that was just as luxurious as the first. It seems as though she might have embarked upon a new journey as a “house flipper.” Even if your alimony money is much lower than Elin’s, you can invest your money in an equally intelligent manner.
Enlist the Help of a Qualified Attorney Today
Remember, you can’t count your chickens before they hatch. In order to actually receive the alimony award you’re hoping for, you’ll need to enlist the help of an Orlando divorce lawyer. Book a consultation with Steve Marsee, P.A., and you can immediately get started with an effective action plan. We can help you strive towards a fair alimony award that you can use to lay the groundwork for a solid financial future. Reach out now to get started.