Alimony Is Alive and Well In New Jersey
Lisa Shapson, The Legal Intelligencer (online)
I would like to clarify the misconception that New Jersey Gov. Chris Christie eliminated alimony in New Jersey when he signed Bill No. 845 into law Sept. 10. The bill, which contained several proposed amendments to the then-current alimony statute, does not single-handedly eliminate alimony in New Jersey. Rather, it eliminates prior terminology and sets forth guidelines for courts to consider when contemplating either modification or termination of an alimony award.
Alimony in New Jersey is an additional remedy under the Divorce Code, which is awarded to help a lower-income spouse maintain the marital lifestyle. Prior to Sept. 10, there were four types of alimony in New Jersey: permanent, limited duration, rehabilitative and reimbursement alimony. The last three types remain the same in the new statute. That is, there are still alimony awards for a limited duration of time and for the purposes of rehabilitating a spouse back into the workforce or reimbursing a spouse who paid for the education of the other during the marriage, resulting in a higher earning capacity.
What has changed is that the new law replaces “permanent” alimony with the term “open durational.” You may be wondering: What’s the difference? Under prior law, permanent alimony was awarded without a termination date or reduction in amount. Since alimony is only modifiable based on a change of circumstances, a permanent alimony obligation was generally terminated only when the payor retired. The core issues of the majority of post-judgment alimony litigation centered on whether it was reasonable for the payor to retire or reduce his or her income due to age or physical constraints, limiting the payor from working the hours he or she was able to work at the time of the divorce. Because folks today live and work longer, there were also several cases where a payor was paying permanent alimony to his or her ex for a period of time exceeding the length of the marriage. Where the purpose of alimony is to maintain the marital lifestyle, paying alimony longer than the actual marriage is one of the inequities of permanent alimony that began to emerge in many cases.
So, how does the phrase “open durational” in the new statute change anything when it sounds as never-ending as “permanent?” Well, open durational alimony now requires the court to consider all alimony factors equally when determining the length of the alimony obligation. If weighing one factor more than the others when determining the length of the award, the court is required by statute to set forth findings of fact and conclusions of law as to why. For marriages or civil unions of less than 20 years, the length of the alimony cannot, by statute, exceed the length of the marriage or civil union.
More importantly, the new statute adds entire subsections—(j) through (n)—which spell out when alimony may be modified and/or terminated. There is a rebuttable presumption that alimony shall terminate upon the payor reaching full retirement age unless the payee can convince the court that a consideration of the enumerated factors set forth in new Sections (j)(1)(a)-(k) require alimony to continue. If the court determines that alimony should continue, then alimony factors set forth in Subsection (b) of the new statute will apply when determining the amount and length of the obligation and any conditions that would necessitate a modification and/or termination of the new obligation.
The statute also sets forth the analysis courts must follow when deciding the modification and/or termination of alimony when the obligor wants to retire prior to reaching full retirement age. Under that scenario, the obligor would have the burden of proving beyond a preponderance of the evidence that the prospective or actual retirement is made in good faith. The factors the court is required to analyze when determining if the obligor’s retirement decision was made in good faith are set forth at (j)(2)(a)-(h).
New Subsections (k)-(m) cover what the court has to consider in the following common scenarios: when a non-self-employed party seeks to modify alimony; when a self-employed party seeks to modify alimony; and when the court is asked to award temporary relief from an alimony obligation. Subsection (n) states that alimony may be suspended and/or terminated based upon the cohabitation of the payee and sets forth factors the court must consider when determining if cohabitation is occurring. Those factors include intertwined finances, sharing living expenses, holding themselves out as a couple, living together, sharing household chores and other relevant evidence, although the court can still find that cohabitation exists even when the couple does not live together on a full-time basis.
The new law also clarifies the fourth factor of the prior statute regarding the standard of living established during the marriage and adds that neither party shall have a greater entitlement to that standard of living than the other. In practice, this means that you cannot impoverish the payor so that the payee can enjoy the marital standard of living. Prior to this clarification, the discussion regarding the marital standard of living was generally one-sided in favor of the lower-income-earning spouse. Higher-income spouses had the burden of maintaining a separate residence while maintaining the house and marital lifestyle for the other spouse and the kids. When representing the payor, these types of discussions were tough because you had to justify to your client why he or she should be happy in a one-room apartment to keep the ex and children happy. Not a fun conversation. Now, the court has to consider the payor’s ability to maintain the marital standard of living when determining the amount of the award as well as the length of the award.
The new statute also requires the court to consider the nature, amount and length of any pendente lite support (pre-divorce) paid when determining the amount and length of alimony. This factor is new to the statute, although in practice, my experience in settling cases has always been to give credit for pre-divorce support payments when negotiating. Until now, courts were not required to consider paid pendente lite support obligations when deciding an alimony award.
Additionally, it is now clear that an award of reimbursement alimony shall not be modified for any reason. When drafting marital settlement agreements, it is good practice to include a statement that reimbursement alimony is non-modifiable in accordance with the new law.
The statute does not modify prior orders or agreements of permanent alimony, but does set forth guidelines when requesting that alimony should be modified or terminated based upon the payor’s retirement or potential retirement and/or the payee’s cohabitation. The statute also echoes Rule 5:5-2 that updated case information statements must be filed when seeking modification of a support obligation.
It will be interesting to see this statute in action. With existing permanent alimony awards playing out over the next several years, I am curious to see how judges will rule when deciding requests to modify and/or terminate under the new law. I also wonder how many open durational alimony awards will actually be awarded or whether limited duration alimony awards will be more common, even in marriages of greater than 20 years.
The really burning question is whether alimony will become downplayed to a secondary remedy as it exists in Pennsylvania—almost an afterthought unless there isn’t sufficient property to equitably divide. Only time will tell. For now, alimony is still alive and well in New Jersey—it just has stricter rules attached to it than before.
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