Courtesy of NJ Lawyer, Theodore Sliwinski, Esq.
- What is alimony?Alimony is the term that is used for payments that are made by one spouse to the other after a divorce. Alimony is different from the equitable distribution of marital property. Equitable distribution looks in the past at what property the parties acquired during the marriage. Equitable distribution involves splitting up the “marital pot.” Meanwhile, alimony is prospective, and it is used to balance the unfairness in the parties’ earning capacities. Alimony is not designed to punish the payor spouse, and it is not a reward to the payee spouse. Instead, alimony is designed to permit both parties to continue to live, as best as possible, the same standard of living that they became accustomed to during the marriage. The parties to a marriage are not taxed on the equitable distribution of marital property. However, alimony payments are taxable to the payee spouse, and tax deductible to the payor spouse.
2. What does “double dipping” mean?
Although alimony and equitable distribution are two different concepts, they are interrelated. The courts try to avoid “double dipping” when they determine an alimony award. Retirement and pension benefits are major marital assets and they are subject to equitable distribution. If the pension benefits are equitably distributed during the divorce, then these pension benefits can’t be used later on for alimony purposes. In simpler terms a dependent spouse can’t receive a share of the pension, and also receive alimony from the pension benefits.
The New Jersey statute that governs “double dipping” states;
When a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony. N.J.S.A. 2A:34-23.
In summary, if a spouse receives his or her share of a pension or retirement benefits under equitable distribution, then that asset cannot be used against to determine alimony.
3. What is pendente lite alimony?
Pendente lite alimony is basically temporary alimony that is awarded before the final judgment of divorce is entered. The goal of pendente lite alimony is to maintain the status quo of the family lifestyle. The court wants to insure that the mortgage is paid, the lights stay on, and that the kids are fed. Pendente lite support is not part of child support. In most cases, an award of pendente lite support is a rude awakening to the husband that his lifestyle and available cash will most certainly change. Alimony of any type is not very popular with men. Many men consider it to be a four-letter word.
4. What is permanent alimony?
There are many types of alimony. To most men, the most vilest form of alimony is called permanent alimony. To a man, if they have to pay a permanent alimony award it really is a nuclear blast to their lifestyle. Permanent alimony is usually awarded in a long-term marriage where there is a large unequal earning capacity between the spouses. Moreover, the dependent spouse must be unable to earn a sufficient income to maintain a reasonably comparable marital lifestyle. Permanent alimony can be modified/reduced based on a change of circumstances. The courts are often flooded with motions to reduce permanent alimony. However, the standards to convince a court to reduce/terminate a permanent alimony award are very strict.
5. What is limited duration alimony?
The most common form of alimony that is awarded is called limited duration alimony. This is also frequently called term alimony. This type of alimony is payable only for a specific period of time. This type of alimony is usually awarded in mid-length marriages. Like permanent alimony, it can also be modified if there is a change in circumstances.
6. What is rehabilitative alimony?
Just like limited duration alimony, rehabilitative alimony is payable for a specific term. The purpose of rehabilitative alimony is to provide support to a dependent spouse while she acquires education or training to permit her to obtain employment that would allow this spouse to support herself. Rehabilitative alimony does not terminate if the supported spouse gets remarried.
7. What is reimbursement alimony?
Reimbursement alimony compensates a spouse for economic sacrifices that were made during the marriage, and these sacrifices helped to enhance the other spouse’s earning capacity. Reimbursement alimony is often awarded in cases where one spouse supports the other so that he or she can obtain a professional degree, with the understanding that both spouses will materially benefit from one spouse having obtained that degree in the future. The court may find it unfair for the spouse with the degree to retain not only the degree, but all of the financial benefits of having the degree. Reimbursement alimony generally covers all financial contributions towards the former spouse’s education, household expenses, and educational contributions. Reimbursement alimony does not terminate if the supported spouse remarries.
8. How is alimony determined?
A family court has a fair amount of discretion to determine an alimony award. The New Jersey Supreme Court has established some very specific guidelines and formulas to determine child support. However, there are no alimony guidelines. Many courts and panels have tried to formulate alimony guidelines. However, this goal is very similar to the Cubs quest to win the World Series. It just will never happen! Many men don’t enjoy paying child support, but they pay it anyway because they love their kids. However, most men are sick of their ex-wive’s and they hate paying alimony. Any set of proposed alimony guidelines is just too controversial and it will never become law.
New Jersey has caselaw and a statute that requires the courts to consider very specific factors when it calculates alimony. There are some guidelines and objective standards for the courts to consider, but there is not specific formula for a family court to calculate alimony.
In general, New Jersey case law states that the court must consider the marital lifestyle, the supporting spouse’s ability to pay, and the dependent spouse’s ability to contribute to his/her own support.
The alimony statute, N.J.S.A. 2A:34-23(b) states that the court must consider the following thirteen factors:
1. The actual need and ability of the parties to pay.
2. The duration of the marriage.
3. The age, physical and emotional health of the parties.
4. The standard of living established during the marriage and the likelihood that each party can maintain a reasonable comparable standard of living.
5. The parties’ earning capability, education and employability.
6. The length of absence from the job market.
7. Parental responsibilities for the children.
8. The time and expense needed to acquire education or training to enable a depended spouse to obtain appropriate employment.
9. The financial and non-financial contributions of each spouse to the marriage.
10. Equitable distribution.
11. Income available and non-financial contributions of each spouse to the marriage.
12. The tax consequences of alimony.
13. Any other factor which the court deems relevant.
In summary, the main purpose of alimony is to permit the dependent spouse to live the same lifestyle after divorce that she lived during the marriage.
9. How does a spouse’s earning capacity affect alimony?
When a court determines alimony the actual income of the supporting spouse is not always the only factor used to determine the alimony award. In many cases, the court will also assess if the deadbeat spouse is underemployed. In my experience, once the divorce starts the husband often loses that second job, they get laid off, and they defer bonuses and promotions. Basically, the men try to paint their economic circumstances as bleak as possible.
The courts most of the time can see through these games and BS. The court may impute income to the deadbeat spouse. The court will analyze the husband’s income based on the New Jersey Occupational Wage Survey. Basically this book gives an average of yearly incomes for specific fields and occupations.
10. Can a dependent spouse be forced to work?
A very popular issue in divorce cases is that the dependent spouse has earning capacity, and that she should go get a job. In cases like these, the lazy spouse may have to be evaluated by an employability expert to assist the court to determine what an appropriate level of income to impute to that spouse. The expert’s report may enable the court to consider whether the dependent spouse has the ability or inability to contribute to her support.
11. Can alimony be changed after the divorce?
Yes. As previously explained, the main purpose of alimony is to permit the dependent spouse to maintain a reasonable standard of living. Alimony can be increased or decreased if the moving party can prove to the court that there was a “change in circumstances” since the divorce. The party who files the application has the burden to prove that there has been a “change in circumstances.”
The most common “change in circumstances” is a major health problem(s), a loss of employment, failure of a business, or a decrease in income, and/or retirement. In my experience it is very difficult to obtain a termination of alimony based on employment loss. However, the court in many cases will reduce/terminate alimony if the payor spouse experiences major health problems that impair his earning abilities.
12. Can a person request alimony after the divorce is over?
In many divorces, neither party receives any alimony. This is because the dependent spouse has sufficient income to support herself, and maintain a reasonable standard of living. However, unforeseen circumstances may change after the divorce to justify alimony. (ie, serious illness and an inability to work) In cases such as these, the sick spouse will file an application for alimony even though the judgment of divorce does not provide for any. If the case has merit, then the court will set a plenary hearing to determine if an award of alimony should be made. This type of hearing is also called a Lepis hearing. The court will examine the financial situation of both parties, the standard of living enjoyed during the marriage, the sick spouse’s current prognosis, and any other relevant factor.
13. What is the standard of law to modify alimony?
Alimony can always be modified upon a showing of a “change of circumstances.” The party who is seeking a modification of alimony bears the burden of proving that there is a “change of circumstances.” The party must show how the changed circumstances have sufficiently impaired her ability to earn a reasonable living.
14. If a spouse remarries does this terminate his obligation to pay alimony?
If the spouse who pays alimony remarries, then this remarriage does not terminate his alimony obligation. If the payor spouse remarries, and he claims that he can no longer support his former spouse, then this factor alone is not a sufficient change of circumstances to just a decrease in alimony.
15. If a spouse receiving alimony remarries does this terminate her right to receive alimony?
If the spouse receiving alimony remarries, then any permanent alimony award or term alimony will be terminated regardless of the parties’ financial circumstances. The rationale for this is because the supported spouse has entered into a new marital partnership, and the former spouse is not required to financially support this new partnership. If the supported spouse’s new marriage fails, then she can’t later petition the court to reinstate the first husband’s alimony obligation.
16. Can a spouse bankrupt his alimony obligations?
If the payor spouse files for personal bankruptcy under Chapter 7 of the United States Bankruptcy Code, then any alimony, maintenance, or support obligations that are paid to a former spouse under a separation agreement or a divorce decree are not dischargeable. In short, a husband can’t wipe off an alimony obligation in a bankruptcy case.
17. Can a spouse file a motion for an increase in alimony?
The courts will examine a spouse’s ability to pay alimony and the payee spouse’s need for alimony. Sometimes, a supported spouse will file an application for an increase of alimony. The grounds for the motion is that the supported spouse needs additional income to maintain a decent lifestyle. If the payee spouse is not receiving sufficient alimony to live, then a post-judgment increase in the payor’s spouse’s income may justify an increase in alimony. The party seeking to have alimony increased bears the burden of proof to demonstrate a change of circumstance. The courts will also examine the parties’ historical standard of living during the marriage.
18. Can a spouse file a motion for a decrease in alimony?
If a payor’s income decreases then he can file a motion to ask the court to decrease or terminate his alimony obligation. The payor spouse must demonstrate that the decrease in income and/or salary was bona fide, in good faith, and not reduced in order to avoid and limit alimony. If a spouse is unemployed or underemployed then the court may impute income to him. The court may also look a person’s unearned income and assets to ruling on any alimony modification motions.
19. If a spouse retires does this constitute a “change in circumstances” to justify a termination of alimony?
If a party has a good faith retirement at the age of 65 then this may constitute a change of circumstances to justify a modification of alimony. The court will also consider several other factors such as; the age of the parties; how the pensions and retirement assets were divided during the marriage; whether the retirement was reasonable; and was the retirement motivated to reduce alimony. Our New Jersey courts have held that when a person retires at the age of 65, he is entitled to a plenary hearing to reduce alimony based on a “change of circumstances.”
If a payor spouse retires before the age of 65, then he is subjected to a more stringent standard to have alimony terminated. The court will then balance the benefits to the payor spouse against the disadvantage to the payee spouse. Only if the advantage to the retiring spouse substantially outweighs the disadvantage to the payee spouse will the court view the retirement as a legitimate change of circumstances which would justify a modification of alimony.
Some other factors that a court considers when it rules on terminate alimony if there is a retirement are: the age and health of the party, his or her motives in retiring; his or her ability to pay support; and the ability of the other spouse to provide for herself.
20. Can alimony be terminated if the supported spouse cohabitates with another man?
In some cases if a supported spouse cohabitates with another man then this may constitute a change of circumstances to justify a change of circumstances. If the supported spouse lives with another man, then the court may reduce alimony. However, cohabitation alone is not enough to reduce alimony. The cohabitation must also be coupled with some economic consequences in order to modify alimony.
The courts use the economic contribution test to determine whether an alimony award to a dependent spouse should be reduced. This test looks to see if the cohabitation is similar to a permanent house situation or a marital like relationship. If the dependent spouse’ new boyfriend or girlfriend reduces the dependent spouse financial needs, then alimony may be reduced. Moreover, if the dependent spouse is using alimony to support the live-in boyfriend, then the payor spouse has very good grounds to reduce alimony.
The payor spouse has the burden to prove that there has been a prima facie showing of cohabitation. The fact of cohabitation triggers a finding of a change of circumstances. Thereafter, the court will set down a hearing, and permit the parties to conduct limited discovery. The payee spouse then has the burden to prove to the court that there is no economic consequence from the fact that she is living with another man.
In many property settlement agreements there are some very specific clauses as to alimony termination if the woman lives with another man. The New Jersey courts have enforced property settlement agreements that provide for a termination of alimony regardless of economic circumstances if the payee spouse lives with another man. The courts however will not uphold a property settlement agreement which attempts to control the former wife’s social activities through the suspension of alimony. If the property settlement agreement places unfair conditions on a former wife that has nothing to do with her financial status, then this agreement will be declared void.
21. If a person receives an inheritance does this affect alimony in any way?
Although an inheritance is not subject to equitable distribution, any income derived from any inheritance can be used to determine any alimony award. Moreover, if a person receives an inheritance this is also a factor to analyze any motion to reduce or increase alimony.
22. Can a person insert an anti-modification of alimony clause in the property settlement agreement?
In many cases, the parties will insert a clause in the property settlement agreement that would prevent any modification of alimony even if there is a potential chance of circumstances in the future. This type of clause is known as an Anti-Lepis clause. These types of clause have been upheld by the courts. However, the courts will not permit the parties to bargain away the courts equitable powers.
23. How does alimony affect the calculation of child support?
When the court calculates child support it will deduct any alimony payments from the payor’s spouse’s income. Moreover, the alimony will be included as income to the payee spouse. In summary, a high alimony payment may result in a reduction in child support. Alimony is deductible by the payor spouse, and it must be declared as income to the payee spouse.
24. Can alimony be extended?
In most cases no. However, some property settlement agreements provide that a spouse may be entitled to alimony after a certain number of years. A dependent spouse will have to file an application for an increase in alimony. The dependent spouse will have to prove a “change of circumstances” to justify an extension of alimony. The courts analyze these applications on a case by case basis. The court will make this determination based on the payor’s ability to pay, both parties’ respective income’s, and the dependent spouses needs.
Additionally, rehabilitative alimony can be extended beyond the expiration date as specified in the property settlement agreement. The standard once again is whether there has been a “change of circumstances.”
25. If a spouse commits adultery does this increase alimony?
The standard answer is no. However, from practical point of view marital fault or infidelity certainly does affect alimony. A court must examine the proofs and determine that the amount of alimony is “fit, reasonable and just.” Moreover, alimony can’t be used to punish a payor spouse, or be used as an award to a payee spouse.
It must be emphasized that the judges are human. If one spouse commits adultery, and if he/she emotionally destroy their spouse, it is very hard for the judge not to be sympathetic. Therefore, in my opinion, marital fault certainly is a very relevant factor that a court considers in making an alimony award. However, the court will not admit it, or list it as a factor to substantiate their decision.
26. Can alimony be awarded during a domestic violence hearing?
The start of many divorces occur when a party files a domestic violence complaint. Quite often, in a DV case, the dependent spouse will also request that the court issue an temporary alimony award. A court in a DV case has the authority to make a temporary alimony award. The rationale for this rule is that the courts do not want the dependent spouse and the children to starve.
27. Can a person limit their exposure to alimony by having an antenuptial agreement?
An antenuptial agreements is also known as a premarital agreement. A premarital agreement is considered valid provided that there has been full disclosure of each party’s financial status. If there is a finding of fraud, duress, or overreaching of any party, then the court will not enforce the premarital agreement. In some premarital agreements, the parties may try to limit alimony in the future. If a premarital agreement is contested, then the court will examine if a denial of alimony to a dependent spouse is equitable and just based on a totality of the circumstances of the case.