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The Divorce Encyclopedia
Buy Out


Term Definition Buy Out - a method used in the distribution of marital assets whereby one spouse acquires the interests in martial assets or community property for a lump sum or payments over time.
Application in Divorce A spouse who wishes to retain ownership of the marital house may "buy out" his or her spouse’s interest in the property.

A spousal support or alimony buy out is used when one spouse pays the other a lump sum amount instead of periodic payments over time.

A retirement account buy out is used if one spouse wishes to retain 100 percent of his or her retirement account in exchange for a lump sum payment. This is also often exercised by a spouse who does not want to risk his or her spouse reaching the age of retirement.

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