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Articles Posted in Spousal support

A spouse in a divorce case has certain responsibilities, including presenting evidence in support of his or her positions on the issues and showing up in court. A recent case out of Connecticut is a good example of what can happen when a person doesn’t meet those responsibilities. Although this case happened in another state, it is a good example for people considering a divorce in New Jersey. It’s also a reminder of just how important it is to fully consider the terms of a settlement agreement – with the help of a lawyer – before signing your name on the line.

binocularsHusband and Wife divorced in October 2009, following some 17 years of marriage in which the couple had two children. They entered into a divorce settlement agreement, resolving custody, property division, and other issues. Husband agreed, as part of the settlement, to pay Wife $400 per month in alimony. The agreement also stated that those payments could be modified or terminated in the event that Wife cohabitated with another person. Husband also agreed to transfer his interest in the family home to Wife, on the condition that she be responsible for paying the mortgage, taxes, and maintenance and repair expenses.

Wife moved from Connecticut to New Jersey and filed for bankruptcy in 2013. When Husband filed a motion for contempt, arguing that she had failed to pay the mortgage and other property expenses, Wife said she simply didn’t have the money to do so. Husband also asked a Connecticut court to terminate his alimony payments, asserting that Wife was now living with another man.

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Many couples beginning the divorce process are often concerned, and rightfully so, about how they will be able to maintain their “standard of living” once the single household is divided in two and doubling many expenses. How will they maintain the standard of living? Sometimes there is enough wealth and equity that the separation and divorce with have a minimal, if any, effect on the spending habits of the parties. On the other hand, quite often, what worked when the parties were together, cannot possibly be accomplished once they are apart.

In a recent written opinion by New Jersey Superior Court Judge Lawrence R. Jones, J.S.C., the Court addressed the issue of pendente lite alimony, and whether parties should be expected to maintain the marital standard of living.

In light of the recent amendments to New Jersey’s alimony statute – N.J.S.A. 2A:34-23(b) – the Court held that 1) Retention of the “marital lifestyle” is not the sole criteria in pendente lite alimony analysis and 2) In many divorce cases, it is mathematically probable that following separation, neither party will be financially able to maintain the former “marital lifestyle.” Real numbers have to be used.

The issue of cohabitation can be a tricky one for divorcing spouses in New Jersey. State law currently allows one former spouse to ask a court to terminate his or her obligation to pay alimony to the other spouse if that person cohabits with another person. In other words, the money may stop if the former spouse lives with a romantic partner in a relationship that’s similar to a marriage. Although that legal principle was recently criticized by two sitting members of the New Jersey Supreme Court, the state’s highest court nevertheless enforced an agreement between former spouses to stop alimony payments upon cohabitation.

wedding ringWhen Husband and Wife divorced in 2006, they signed a property settlement agreement (PSA) resolving issues like how the former spouses would divide their assets. They also agreed that Husband would pay Wife more than $1,300 per week in alimony. The PSA stated that the payments would continue until either spouse died or Wife remarried or cohabitated with another person.

Husband asked a court to terminate his alimony obligation roughly two years later, arguing that Wife was now living with another man. Wife acknowledged that she was in a committed relationship with the man for 28 months leading up to a trial on the issue. But she also asserted – and the court agreed – that the relationship had since ended. As a result, the trial court suspended Husband’s alimony obligation during the length of the relationship. It allowed him to pay Wife half of the regular amount of the alimony payments until he recouped the money paid while she was cohabitating with the man.

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If you want to get a child support or alimony order changed in New Jersey, you have to show that the circumstances have changed in a way that justifies the change. As the State’s Superior Court recently explained, judges are expected to compare the circumstances in place at the time the award was set to those in place at the time the request is made.

workersHusband and Wife divorced in 2012, following 11 years of marriage in which they had two kids. Husband was working as a loan officer at the time, bringing in about $24,000 per year. He was ordered to pay $231 a month in combined alimony and child support. That order was still in place two years later, when Husband went back to court and asked a judge to modify the arrangement. He said he’d been laid off due to an economic downturn and was unable to find a new job. Husband also said he’d lost his professional license as a result of poor credit and had lost money in real estate investments.

The trial court denied Husband’s motion to modify the support order. The judge said she wasn’t inclined to change the order so soon after an eight-day trial on the issue. She also found that Husband remained “capable of working” and “doing more.” As a result, the judge said Husband had not proved a sufficient change in circumstances to justify reducing the support award. Although Husband argued in a motion for reconsideration that Wife was living with her new boyfriend and had the capacity to make more money, the court said he didn’t present enough evidence to prove those claims.

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New Jersey divorce cases often raise complicated issues about how to divide property and calculate income. The Superior Court recently handled.  The Court was called on to decide whether certain payments one spouse received from his employer after a divorce should count as bonus money to be shared with his ex-wife under the terms of a settlement agreement. The answer? It depends.

writing checkHusband and Wife were married for 19 years and had four kids before divorcing in 2012. They eventually reached a settlement agreement, under which they resolved child support, alimony, and other issues. Husband agreed as part of the deal to give Wife 30 percent of any bonuses as supplemental alimony. He also agreed to pay an additional two percent of each bonus in child support.

Wife later went back to court to enforce the agreement. She claimed she was entitled to 32 percent of certain compensation that Husband received beyond his salary. Husband explained that he was let go from his job in 2013. He said the additional money wasn’t bonus payments but instead payments for severance and stock options in the company. He also submitted documentation from his former employer to back up this argument.

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When a person who is paying or receiving alimony wants to change the arrangement – whether it’s to increase, decrease, or stop the payments altogether – he or she usually has to show a court that there’s been a change in circumstances to justify the request. As a recent case out of New Jersey’s Superior Court shows, that can be a tough thing to do in situations in which the former spouses have fixed incomes and expenses.

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Husband and Wife divorced in 2003, following nearly a decade of marriage in which the couple didn’t have any children. They eventually entered into a consent agreement, under which Husband pledged to pay Wife $1,000 per month in alimony. They later agreed to kick that amount up to $1,750 a month. It wasn’t soon thereafter, however, that Husband went back to court and asked a judge to either reduce the payments or terminate them completely. A court agreed to reduce the payments to $1,250, noting that Wife was also getting Social Security disability benefits and health care assistance through Medicare.

Husband appealed the decision, arguing that the payments should have been trimmed even more. The issues bounced around the courts before landing back before the Superior Court. It said Husband failed to show that the circumstances had sufficiently changed to justify a further reduction of the alimony payments. The state’s alimony law was changed in 2014 to presume that a former spouse paying support should be relieved of that duty when he or she retires. The Court explained, however, that the new law doesn’t apply to alimony deals in place before the law took effect.

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One of the many questions that often come up in spousal support or alimony cases is whether the support payments continue after the ex-spouse making those payments retires. Alimony may be terminated or modified upon the prospective or actual retirement of the obligor.  An Act concerning alimony was passed in 2014 which applies to divorce occurring after that date, but with provisions concerning retirement for divorces prior to the Act where there was a written agreement or final alimony order.

1. There shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age, except that any arrearages that have accrued prior to the termination date shall not be vacated or annulled.  The Court may set a different alimony termination date for good cause shown based on specific written findings of fact and conclusions of law.  The attorney will gather the information necessary to prepare the documents in support of the client’s application if an agreement cannot be reached.  There must be good reasons to oppose termination of alimony upon reaching full retirement age.

The rebuttable presumption may be overcome if, upon consideration of the following factors and for good cause shown, the Court determines that alimony should continue:

a.  the ages of the parties at the time of the application for retirement;

b.  the ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award;

c.  the degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;

d.  whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;

e.  the duration or amount of alimony already paid;

f.  the health of the parties at the time of the retirement application;

g.  assets of the parties at the time of the retirement application;

h.  whether the recipient has reached full retirement age as defined in this section;

i. sources of income, both earned and unearned, of the parties;

j.  the ability of the recipient to have saved adequately for retirement; and

k.  any other factors that the Court may deem relevant.

If the Court determines, for good cause shown based on specific written findings of fact and conclusions of law, that the presumption has been overcome, then the Court will apply the alimony factors that are relevant to the parties’ current circumstances to determine whether modification or termination of alimony is appropriate.  These factors may include as well as other factors:

a.  the actual need and ability of the parties to pay;

b.  the duration of the marriage;

c.  the age, physical and emotional health of the parties;

d.  the standard of living during the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living;

e.  the equitable distribution of property;

f.  the income available to either party through investments of any assets held by that party;

g.  the tax treatment of any alimony award.

If the obligor intends to retire, but has not yet retired, the Court shall establish the conditions under which the modification or termination of alimony will be effective.

2.  Where the obligor seeks to retire prior to attaining the full retirement age as defined in this section, the obligor shall have the burden of demonstrating by a preponderance of the evidence that the prospective or actual retirement is reasonable and made in good faith.  Both the obligor’s application to the Court for modification or termination of alimony and the obligee’s response to the application shall be accompanied by current Case Information Statements or other relevant documents as required by the Rules of Court, as well as the Case Information Statements or other documetns from the date of entry of the original alimony award and from the date of any subsequent modification.

In order to determine whether the obligor has met the burden of demonstrating that the obligor’s prospective or actual retirement is reasonable and made in good faith, the Court shall consider the following factors:

a.  the age and health of the parties at the time of the application;

b.  the obligor’s field of employment and the generally accepted age of retirement for those in that field;

c.  the age when the obligor becomes eligible for retirement at the obligor’s place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits;

d.  the obligor’s motives in retiring, including any pressures to retire applied by the obligor’s employer or incentive plans offered by the obligor’s employer;

e.  the reasonable  expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution;

f.  the ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours;

g.  the obligee’s level of financial independence and the financial impact of the obligor’s retirement upon the obligee; and

h.  any other relevant factors affecting the obligor’s decision to retire and the parties’ respective financial positions.

If the obligor intends to retire but has not yet retired, the Court shall establish the conditions under which the modification or termination of alimony will be effective.

3. When a retirement application is filed in cases in which there is an existing final alimony order or enforceable written agreement established prior to the effective date of this act, the obligor’s reaching full retirement age as defined in this section shall be deemed a good faith retirement age.  Upon application by the obligor to modify or terminate alimony, both the obligor’s application to the Court for modification or termination of alimony and the obligee’s response to the application shall be accompanied by current Case Information Statements or other relevant documents as required by the Rules of Court, as well as the Case Information Statements or other documents from the date of entry of the original alimony award and from the date of any subsequent modification.  In making its determination, the Court shall consider the ability of the obligee to have saved adequately for retirement as well as the following factors in order to determine whether the obligor, by a preponderance of the evidence, has demonstrated that modification or termination of alimony is appropriate:

a.  the age and health of the parties at the time of the application;

b.  the obligor’s field of employment and the generally accepted age of retirement for those in that field;

c.  the age when the obligor becomes eligible for retirement at the obligor’s place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits;

d.  the obligor’s motives in retiring, including any pressures to retire applied by the obligor’s employer or incentive plans offered by the obligor’s employer;

e.  the reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution;

f.  the ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours;

g.  the obligee’s level of financial independence and the financial impact of the obligor’s retirement upon the obligee; and

h.  any other relevant factors affecting the parties’ respective financial positions.

4. The assets distributed between the parties at the time of the entry of a final order of divorce or dissolution of a civil union shall not be considered by the Court for purposes of determining the obligor’s ability to pay alimony following retirement.

COURT CASES

The Court pointed out in a case that the standard is a little different for alimony awards that were issued before that law took effect in 2014.

summer-fun-on-the-lake-1-1367107Husband and Wife divorced in 1991, following 22 years of marriage. As part of the split, Husband was ordered to pay Wife spousal support on a schedule that declined over time. Husband made the support payments for 24 years before he asked a court to terminate his obligation. He was 66 years old at the time, and he said he’d recently retired because of a number of medical conditions. Husband was living off of Social Security benefits and his half of a pension that was divided with Wife as their shared marital property.

Wife responded by asking the trial court to keep the alimony obligation in place. She said she also suffered from a number of health conditions, and her income came from her share of the pension and Social Security benefits, as well as about $2,500 from working as a consultant. She also argued that the alimony award could not be modified, pursuant to the law on the books at the time of the divorce. The trial judge disagreed, explaining that state law presumes that alimony obligations terminate when the person making the payments retires.

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New Jersey law generally presumes that spousal support or alimony payments should be terminated when the person making the payments retires. This general presumption is rebuttable, however. As the state’s Superior Court recently explained, courts will not use the presumption to undo or modify an agreement between former spouses about how they will handle alimony.

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Husband and Wife divorced in 2001, following a 25-year marriage in which they had two kids. As part of a settlement agreement, Husband pledged to pay Wife $250 per week in “permanent, non-modifiable” spousal support. The agreement specifically stated that the alimony payments could not be changed as a result of either spouse’s inability to find work, or an illness, incapacity, or inability to work for any other reason.

Husband sought to terminate the payments in 2014, explaining that he had been forced to retire early because of an illness. He was more than $5,000 in arrears at the time. Husband was bringing in a little more than $45,000 per year in retirement benefits, according to the family court that heard his request to terminate the payments. The court declined that request, noting that the agreement expressly stated that the alimony wasn’t modifiable. The trial judge also noted that Husband’s salary more than doubled in the 10 years following the divorce and before his retirement. Nevertheless, his payments to Wife did not increase accordingly.

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Former spouses eventually move on with their lives after a divorce, including by starting new relationships. Those relationships can raise some tricky legal issues in cases in which one former spouse is paying the other alimony. New Jersey law allows a court to terminate or suspend alimony payments when a spouse receiving those payments “cohabitates” with another person. The law defines cohabitation as a “mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.” The state’s Superior Court recently weighed in on just what that means.

dollarsWhen Husband and Wife divorced in 2004, Husband agreed to pay Wife $2,500 per month in alimony. They also agreed that the payments could be modified or terminated under certain circumstances, including “cohabitation.” It was that provision of the deal that Husband highlighted when he later went back to court to try to get the alimony obligation terminated. He said Wife was cohabitating with another man and that the couple publicly put themselves out as the equivalent of married spouses. He also pointed to various Facebook postings showing that the couple attended social and family events together and that Wife’s children referred to the man as “Papa Thom.”

Wife denied that she was cohabitating with Thom. Instead, she said she spent about 100 nights per year with the man and that they kept their finances and assets separate. She also provided bank statements showing that she paid all of her bills from her savings account and that there were no unaccounted for contributions. That was good enough for a trial judge, who denied Husband’s request to terminate the alimony payments. The judge also declined to allow Husband additional discovery on the cohabitation issue. Although he did require Wife to provide an accounting of her household expenses and how she was covering them, the judge said Husband didn’t provide enough evidence of cohabitation to justify full-blown discovery.

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In 2014, there were amendments to the alimony statute.  One provision was that alimony may be suspended or terminated upon cohabitation of the payee spouse.

New Jersey Superior Court Family part has the power to order one divorcing spouse to pay the other alimony, or what’s also commonly called spousal support. These payments are intended to help the receiving spouse maintain something akin to the lifestyle that he or she enjoyed during the marriage. The amount depends on a number of factors, including but not limited to each spouse’s financial situation and earning capacity. The support may be temporary or permanent, and may be terminated if certain changes in circumstances occur. One such change occurs when the spouse receiving the payments starts living with another person. As New Jersey’s Superior Court recently explained, however, cohabitation’s impact on alimony depends on when the support was resolved.  Was it before the new law of 2014 or after?

rural-home-1233045Husband and Wife divorced in 1992. They also entered into a settlement agreement, in which Husband agreed to pay Wife $100,000 in alimony per year for five years. Husband additionally agreed to increase that amount to $150,000 in 1997. He went back to court in 1996, however, and asked a judge to terminate his alimony obligation because Wife was living with another person. A trial court declined to completely eliminate the alimony obligation, but it did reduce the annual amount by more than $12,000. The Superior Court upheld the decision on appeal.

Husband returned to court more than 17 years later, this time asking that his alimony obligation be terminated based on a change to state law that passed in 2014. Specifically, the state legislature amended the alimony statute to provide that “alimony may be suspended or terminated if the payee cohabits with another person.” A trial court agreed, finding that the amendment qualified as a change in circumstances on which the alimony should be terminated. The court found that Husband was entitled to be relieved of his support obligation because he was now 77 years old and had reached full retirement age.  He was still working.

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