After a divorce, spousal support and alimony agreements are designed to ensure that both spouses continue the standard of living established during the marriage. This support, whether permanent or temporary, allows both to successfully start the new chapter of their lives apart.
The end of permanent alimony in New Jersey
New Jersey’s alimony law significantly changed in 2014. On September 10, 2014, New Jersey amended its alimony law, N.J.S.A. 2A:34-23. This reformed law completely changes the way judges and attorneys approach alimony. The most significant change is the elimination of “permanent” alimony, which is replaced with “open durational” alimony. Courts in New Jersey can now award one or a combination of the following types of alimony: open durational, limited duration, rehabilitative and reimbursement.
Alimony and retirement:
Other important changes to the alimony law include limiting the duration of alimony for marriages shorter than twenty years. Barring “exceptional circumstances,” for marriages lasting under twenty years, the length of alimony will not exceed the length of the marriage. The statute also creates an automatic right for a supporting spouse or obligor to modify or terminate his or her alimony obligation based on having reached full retirement age. Full retirement age is the age when one is eligible to receive full Social Security benefits. In a related vein, the law creates factors for the courts to consider when an application is made by an obligor for modification or termination of his/her alimony obligation based on “early” retirement, or retirement prior to reaching full retirement age. Traditional retirement age for some professions may be younger than full eligibility for Social Security benefits and there is a mechanism to address this under the new alimony law.
Alimony and cohabitation of the supported spouse:
New Jersey’s alimony law establishes additional factors for when courts are presented with requests to modify or terminate alimony based on a supported spouse’s alleged cohabitation. The notion of cohabitation has been expanded and does not necessarily require a couple to share a home on a constant basis. The alimony law directs the court to look past the physical address to intertwined finances, shared living expenses, recognition of the relationship in social or familial circles, and sharing of household chores to determine whether or not a cohabitation situation exists. Whether or not someone is living with another full time is not dispositive of whether or not there is cohabitation.
Prior to making a decision on alimony award, the courts are still required to address fourteen factors: 1. Need and ability of the parties to pay; 2. Duration of the marriage; 3. Age and health of the parties; 4. Standard of living established during the marriage; 5. Earning capacities and employability of the parties; 6. Length of absence from the job market for supported spouse; 7. Parental responsibility for the children; 8. Time and expense necessary to re-enter the workforce; 9. History of financial and non-financial contributions to the marriage; 10. Equitable distribution of property; 11. Income available through investments; 12. Tax treatment and consequences to both parties of any alimony award; 13. Nature, amount, and length of pendente lite support, which was not a factor under the older law; and 14. Any other relevant factors.
With respect to the marital lifestyle factors, the statute directs that both parties are equally entitled to maintain a comparable lifestyle to that which was enjoyed during the marriage, with neither party having a greater entitlement to the marital lifestyle. The law goes on to say that the court must provide specific written findings should it determine that certain factors are more or less relevant when determining an award for alimony. No one factor should be take precedence over any other based on the alimony law.
In addition to the elimination of “permanent” alimony from the law, another significant change is that the courts are now required to consider the amount of pendente lite support paid by an obligor prior to the entry of the final judgment of divorce. It has long been argued and negotiated that payor spouses should receive some credit either for what some consider a high pendente lite support obligation. This factor could be a significant issue when negotiating alimony in shorter duration marriages.
For marriages lasting less than twenty years, the law has provided that the alimony term shall not last longer than the marriage, barring any exceptional circumstances. This does not mean that the length of the alimony term should equal the length of the marriage. The court must still consider the above factors in making the award. When exceptional circumstances are present, the award of alimony may be longer than the marriage or even open durational. Some of the exceptional circumstances which may warrant a longer alimony term include the degree of dependency of one party on the other during the marriage, whether one spouse has a chronic illness or unusual health circumstance, or whether one spouse has received a disproportionate share of the marital estate.
The reformation of the alimony law in 2014 has provided attorneys with much clearer parameters when counseling clients or potential clients on the length or amount of alimony he or she may be entitled to receive or may be obligated to pay.
Alimony & retirement of the obligor spouse:
The 2014 revisions to the alimony law address the analysis to be performed when deciding on an application to modify or terminate alimony based on the payor spouse’s actual or prospective retirement. A rebuttable presumption has been created that alimony will terminate upon the obligor attaining full retirement age. That presumption can be overcome by certain factors including but not limited to the age of the parties, the extent of economic dependency, the length of alimony already paid, and whether the payee spouse had the opportunity to save for retirement. For those who have not yet reached full retirement age but have applied to modify or terminate alimony based on a good faith retirement, there are more factors to consider. In those cases, the courts are directed to consider among other things the average age of retirement for others in the field, whether the obligor would have benefited from continuing to work, and the obligor’s motives for retiring. If the court makes a finding of “good faith” the application to modify or terminate alimony based on the good faith, albeit “early,” retirement may be granted.
Alimony & changed circumstances:
The alimony law addresses modifications of alimony based on changed circumstances. An obligor who suffers a significant financial setback need not wait years to obtain relief based on changed circumstances. The alimony law provides that when a non-self-employed payor spouse seeks to modify or terminate alimony based on changed circumstances, the court must first determine the reason behind the obligor’s reduced income and the efforts to find comparable employment. Additionally, the courts must look to whether efforts were made to find work in the same or different fields, whether there is any severance pay, and also consider the effect on the payee spouse. For a traditional W-2 wage earner who is not self-employed, any application made following the loss of employment can be made after 90 days, however the court has the ability to make a modification or termination retroactive to the date employment was lost. When a self-employed supporting spouse makes an application to terminate or modify alimony based on reduced income, he or she must provide an analysis of their income and benefits now and when alimony was last established or modified. The alimony law permits the court to provide temporary relief in situations where the substantial changes in circumstance are likely not permanent.
Alimony is a continually changing body of law. Court decisions over the next several years will likely impact the interpretation of the alimony law. The outcome often turns on the facts of each individual case. However, this newly reformed alimony law has paved the way for new approaches and strategies in negotiations and litigation. The Paris P. Eliades Law Firm, LLC is proud that our very own Paris Eliades, Esq. was one of the leaders instrumental to bringing about change to the alimony law. If you require experienced and knowledgeable matrimonial counsel, the attorneys at Paris P. Eliades Law Firm, LLC are here to assist you.
48 Sparta Avenue
Sparta, NJ 07871