Alimony in New Jersey
Alimony, also called spousal support, can become a point of heavy contention during divorce.
Alimony is a financial payment that one spouse makes to their ex once a divorce is final. Alimony is intended to allow both parties to continue living, financially, the way they did during the marriage. Alimony is typically awarded to the spouse who was financially dependent on the other spouse during the marriage. In New Jersey, alimony award is gender neutral and based on income rather than the sex or role of each spouse in the marriage.
Determining Alimony in New Jersey
Unlike for determining child support, there is no standardized formula to calculate alimony in New Jersey. Instead, according to N.J.S.A. 2A:34-23(b) the court system is given the discretion to award payment based upon fixed factors:
- The actual need of the parties to pay
- The length of the marriage
- The age, physical and emotional health of each spouse — which affects the ability to generate income
- Earning capacity — education level, skills, and employability
- Length of absence from employment
- Parental responsibilities
- Time and expense required to obtain an education
- History of contributions to the marriage
- Distribution of property
- Income available from other sources
- Tax treatment and consequences to both parties
- The nature, amount, and length of pendente lite support — temporary support — paid
- Court discretion — including grounds for divorce
Even if both parties agree that support is appropriate, disagreements often arise regarding the amount and duration of payments that should be received, especially when child support is also being considered.
Type of New Jersey Alimony
There are several different types of alimony awarded in New Jersey. The different types are based on the financial need and the ability of the other party to pay. Alimony is not meant to be a punishment for one spouse while allowing the other to live a life of luxury. Alimony is designed to help both spouses maintain a similar financial life that they led in the marriage. It is for this reason that there is no longer <i>permanent alimony</i> available in the state of New Jersey. Alimony awards must have specified end dates and purposes.
As discussed above, the laws recently changed in New Jersey to disallow permanent alimony. This <i>forever</i> alimony was historically awarded to those spouses who gave up educational or career opportunities to fulfill marital duties — raising children, caring for other family members, or for the sake of the spouse’s educational or career opportunities. This type of alimony was replaced with other forms of spousal support.
Open Durational Alimony
Open durational alimony is the spousal support type that replaced permanent alimony. Because permanent alimony was never intended to be awarded for the duration of a lifetime, the change is really a change in semantics. To be awarded open durational alimony, spouses must have been married more than 20 years and continues until either both parties or the courts modify or terminate it, or until there is a change in circumstance.
Temporary Alimony — Alimony Pendente Lite
Pendente lite alimony is awarded to an unemployed or low-earning spouse to help cover living expenses during the divorce proceedings. This is intended to be temporary until the division of assets and determination of on-going alimony is completed. When on-going alimony is calculated, the amount of temporary alimony that was paid during the divorce will be taken into account and due amounts will be adjusted accordingly.
Limited Duration Alimony
Limited duration alimony is a common type of alimony that is awarded to help support an unemployed or low-earning spouse cover expenses until they are able to become self-supporting. The amount paid is based on financial need and can change over time. Many judges will place stipulations on this kind of alimony such as the spouse will be actively seeking employment, will access investments, or will use other assets to supplement income.
Rehabilitative alimony is a temporary alimony that is awarded while a spouse takes the necessary steps to become self-supporting. This alimony is intended to help support those spouses who gave up educational or career opportunities for the sake of raising the family or for the other spouse’s career. Rehabilitative alimony requires the awarded spouse to submit a plan of action and time frame that the spouse needs to complete education required to get a self-supporting job or career.
Reimbursement alimony is designed to retroactively compensate a spouse who financially supported the other while they attended higher education, with the understanding that it was an investment that they would benefit from. If the divorce occurs before they are able to reap the benefits of said support, they may be entitled to reimbursement.
If you believe you should receive alimony or that your spouse will seek it, it is essential that your divorce attorney be well versed in current New Jersey alimony case law and any recent appellate decisions regarding alimony, as well any trends and tendencies applicable to your circumstances. Your alimony negotiation, mediation, or litigation plans must be aligned with those for equitable distribution of assets and property, so it is vital you retain legal counsel with a sense of well-rounded case strategy. Bart W. Lombardo, Esq. has more than 20 years experience in family and divorce law and is well versed in all the facts and data that are pertinent to alimony. Contact him, today to schedule your consultation and review of your case.
Changes to Alimony or Spousal Support Awarded During Divorce Proceedings
One major concern that becomes a point of heated contention during divorce proceedings is whether or not alimony will change. For the receiving spouse, they are depending on the alimony to continue living the life they know and unanticipated changes can cause stress and anxiety. On the other hand, a spouse who is responsible for paying the alimony may also suffer from stress related to now financing two separate households — their previous marital one and their new one. The state of New Jersey has structured alimony so that no awarded amount or duration of time is set in stone and can be adjusted to accommodate change in income and circumstance. Here are a few things that will affect the amount and duration of alimony payments.
Length of Marriage
No alimony payments should exceed the length of the marriage. For instance, if a couple is married for six years and one spouse is awarded alimony, the payments will not exceed six years duration.
Change in Circumstance
Any type of alimony type can be modified or terminated if there is a substantial change in circumstance for either party.
- Death – in the event of either spouse’s death, alimony payments will immediately cease.
- Retirement – retirement income is not considered income that is eligible to be calculated toward alimony payments. If a portion of a retirement income was awarded in the equitable division of assets, payments will be made accordingly. However, if the retirement income was not a part of the division of assets, calculated income will be adjusted to disclude retirement payments.
- Change in income – this can apply to either party, where the payer is burdened or unable to afford their own expenses due to the alimony payment, unless the reduction in income was voluntary — i.e.voluntarily unemployed, or the payee is not able to keep up with bills because of a low alimony payment. Either party will have to prove to the courts that the change in circumstance was involuntary and warrants a change in alimony payments.
- Disability – if the payer becomes disabled, often times alimony will be terminated to allow any income or assets to be used for their own care.
- Cohabitation – if the payee cohabitates with another party, alimony may be reduced, suspended, or terminated. Cohabitation includes anything that includes another party intertwined financially, including joint holdings, liabilities, or responsibilities for living expenses, this does not necessarily include the sharing of one household. It can also include an intimate personal relationship as recognized by the payee’s friends and families.
- Remarriage – at the time of the payee’s marriage to another party, the alimony payments will be terminated.
Unfortunately, any attempt to intentionally either increase need by the payee or decrease income by the payer, is not looked upon well by the courts. For instance, if a payer takes a reduction in pay or seeks unemployment in an attempt to reduce payments, it is not likely that the attempts will be successful. Another example is applying for early retirement because retirement income is not calculated as income that is applied toward alimony. However, if the payer is legitimately laid-off or retires in good faith, alimony amounts may be modified. Conversely, if a payee intentionally does not graduate from an education program, declines job offers, or takes a voluntary reduction in pay, the courts may reduce alimony payments rather than increase them. Additionally, alimony obligations are not negated by a bankruptcy.
All alimony payments are tax deductible by the payer and should be claimed as income by the payee. Taxes taken out at the time of payment are part of the payment and should not be paid in addition to the payment. For example, if an awarded alimony amount is $1,000 monthly, and taxes on the amount equal $42, the payee shall receive $958.
Whether you are the payer or the payee, it is important to understand your obligations and terms and to have an experienced alimony lawyer on your side. Contact Bart W. Lombardo for your alimony consultation.