Alimony Doesn’t Have to be Confusing – Get the Information and Representation you Deserve.
What is Alimony?
Alimony is the payment of money by one ex-spouse to the other following a divorce, generally for the purpose of allowing the recipient to maintain a similar lifestyle to the one enjoyed during the marriage. Nevertheless, as explained below, alimony may have other purposes as well, depending on the facts of each case.
New Jersey’s alimony statute provides for four different types of alimony that can be awarded as part of a divorce in New Jersey: (1) open durational (previously known as permanent alimony); (2) limited duration; (3) rehabilitative; and (4) reimbursement.
Both open durational and limited duration alimony are for the purpose of allowing the recipient to maintain a similar lifestyle to the one enjoyed during the marriage, and differ only in duration. Open durational alimony is permanent in nature, where limited duration alimony is for a set term of months or years. These are the most common types of alimony awarded in New Jersey.
The purpose of rehabilitative alimony is to provide economic assistance to a former spouse while he or she takes the necessary steps to regain economic self-sufficiency, such as re-entering the workforce or obtaining the necessary training and education to increase earning capacity.
Finally, reimbursement alimony is designed to compensate a spouse who made financial sacrifices to allow the other spouse to obtain an education of license to enhance the couple’s future standard of living.
Understanding which type (or types) of alimony might be appropriate in your case is a critical part of your divorce.
How is Alimony Calculated?
New Jersey does not have any specific formula for the calculation of alimony. Instead, New Jersey law provides a non-exhaustive list of factors to consider, including the length of the marriage, the type and value of the assets of the parties, the economic circumstances of the parties, the parties’ education and employability, and the standard of living established during the marriage.
Most significantly, courts tend to focus on the marital lifestyle the parties had during the marriage, and attempt to use alimony as a way of ensuring both parties are able to maintain that lifestyle.
Determining Each Parties’ Income
While there is no set formula for the calculation of alimony in New Jersey, it goes without saying that both parties’ incomes are critical to making the determination of whether alimony is necessary, and if so, how much should be paid.
In many cases, a simple look at each parties’ tax returns and supporting schedules and documents provides the income picture for each spouse. Nevertheless, it is possible that either or both of the parties are under-employed, meaning that he or she is earning below their capacity. Perhaps this is because a spouse is only working part-time, or perhaps not working at all. In such cases, it may be necessary to impute income to an under-employed spouse based on the income they could be earning.
In addition, when either or both spouse owns their own business, or receives income that might not be completely or correctly reported, it may be necessary to carefully review their financial documents to reach a more accurate picture of their true income. Alternatively, in some cases, the retention of a business valuation expert, accountant or other financial professional to parse through business and bank records might be necessary if the parties cannot agree on the true income available to the parties.
How Long will Alimony Last?
As explained above, open durational alimony is permanent, though it may be modified or terminated under certain circumstances, as explained below. On the other hand, limited duration, rehabilitative and reimbursement alimony are paid for a specific term of months or years, which can also be modified or terminated, depending on the circumstances.
As with determining the amount of alimony, there is no set formula in New Jersey to determine the length of time that alimony will last, and consideration must be given to a variety of factors specific to each case. Nevertheless, the newly amended alimony statute now provides that for marriages less than 20 years in duration, the length of alimony cannot exceed the length of the marriage, unless exceptional circumstances exist.
Modifying or Terminating Alimony Post-Divorce
Alimony can be modified after a divorce if the party seeking the change can show a change of circumstances that warrants a change in the support amount. Generally, the changed circumstances must be significant and long-lasting. For example, the loss of a job or a health issue, for a short time, may not be sufficient to constitute a changed circumstance. On the other hand, a significant and debilitating illness or disability, or lasting change in income can be the basis for either an increase or decrease in the support amount.
As a result of an amendment to the New Jersey alimony statute in 2014, if someone is seeking to decrease their alimony obligation as a result of a decrease in income, the amended statute requires that the individual wait 90 days from the decrease in income before filing a motion for a modification.
Another potential grounds for a modification of alimony is the retirement of the party who is paying alimony. As a result of the new amendments to the New Jersey alimony statute, retirement impacts people differently, depending on when their divorce matter was concluded.
For parties whose divorce was concluded before September 2014, retirement of the payer serves as a reasonable ground for the termination of alimony, but the burden still falls on the payer to prove that such retirement is appropriate under the circumstances.
For parties whose divorce was concluded after September 2014, retirement of the paying spouse at the age he or she would obtain full Social Security benefits, is presumed to terminate alimony. In other words, the burden of proof is reversed, and falls on the recipient to demonstrate why such retirement should not act to terminate alimony.
In addition to the above, three other factors can act to terminate, modify or suspend alimony: (1) cohabitation by the recipient; (2), remarriage of the recipient; and (3) death of either party. Given that the death of the payer acts to terminate alimony, it is very common as part of a divorce judgment or settlement agreement for the payer to be obligated to secure his or her alimony obligation with a life insurance policy payable to the recipient, in the event of the payer’s death prior to the conclusion of the alimony term.
Regardless of whether you are faced with a divorce, or are struggling with a potential modification or termination of alimony, The Law Office of Steven M. Cytryn, LLC can assist you with determining the type (or types) of alimony that might be appropriate for your case, or whether and how to pursue or defend an application to modify or terminate alimony. Scheduling a consultation will allow you to better understand what you may realistically expect based on the facts of your case, and gives you the best chance of effectively handling your matter. Call us at (732) 214-1103 now for a consultation.