New Jersey’s alimony laws changed dramatically as of September, 2014. The new laws mainly apply to couples currently in a divorce proceeding or who filed after September, 2014, rather than to divorces that have been completed, although there are exceptions.
Under prior law, the four types of alimony as provided by statute were (1) “permanent alimony” (which most people think of, especially in a long term marriage where the parties have unequal earning potential); (2) “rehabilitative alimony” (designed for a short period of alimony and to enable the receiving spouse to get back on his or her feet in terms of employment, education, or the like); (3) “reimbursement alimony” (designed to reimburse a spouse who financially supported their husband or wife so they could attend school or gain employment skills); and (4) “limited duration alimony” (designed as a catch-all when the situation calls for alimony which cannot be easily classified into one of the other three categories).
The new statute eliminates “permanent alimony” and replaces it with “open duration alimony.” This change does not mean that a spouse cannot obtain alimony for an indefinite period of time. A marriage of 20 years or more will, as always, compel the courts to apply a host of factors to determine the appropriateness of alimony, how much, and for how long. Those factors, as always, include one party’s ability to pay and the other party’s need for support, each party’s health and age, the length of the marriage, the financial history of the parties and how they each contributed financially during the marriage, the way the marital property is going to be divided, each party’s earning capacity and absences from the job market, each spouse’s parental duties and responsibilities during the marriage, the need for additional schooling, tax consequences, or any other factor a court considers to be pertinent.
However, the first major change affects marriages lasting less than 20 years. For those marriages less than 20 years in duration, a court can award alimony with a predetermined end date. How does a court determine that end date? A court must go through several steps to determine such alimony: First, the court must initially determine whether duration alimony is even appropriate, and must do so based on analyzing the above statutory factors. Judges will consider whether or not both sides have increased living expenses due to a need for separate residences, and that neither party has a greater right than the other to the marital standard of living. Second, absent “exceptional circumstances,” the time limit for alimony cannot exceed the length of the marriage itself. By example, for a marriage lasting 13 years, a court cannot ordinarily award alimony that exceeds 13 years. In determining the exact length of the term in this example, the court will consider the length of time it would reasonably take for the recipient to improve his or her earning.
So in this example, unless there are “exceptional circumstances”, the length of the alimony award will not exceed 13 years. The next question therefore becomes, what are “exceptional circumstances” a court would consider in awarding a term of alimony that exceeds the length of the marriage itself? These exceptional circumstances include the ages of the parties at the time of the marriage and at the time of the award, the degree of dependency of one spouse on the other, whether a spouse has a chronic illness or unusual health problem, whether one spouse has received a disproportionate share of the marital estate, the impact of the marriage upon either party’s ability to become self-supporting or the primary caretaker of any minor child, tax considerations, or any other reason the court wants to consider.
The second major change concerns a payor’s retirement on his or her alimony obligations. Up until now, the law was very unclear and inconsistent. Under the new law, there is a “rebuttable presumption” that alimony shall terminate upon the payor’s attaining full retirement age under the Social Security Act. However, this presumption can be overcome by the recipient of alimony if he or she can prove that alimony should continue. The factors the recipient would want to show to prove that alimony should continue beyond the payor’s retirement include the age of the parties at the time of the application for retirement, the ages of the parties at the time of marriage and the alimony award, the degree and duration of the recipient’s economic dependency upon the payor during the marriage, whether the recipient has sacrificed claims or property for a longer period of alimony, the amount and duration of alimony paid to date, the health of the parties at the time of the application for retirement, assets of the parties at the time of the application for retirement, whether the recipient has also reached full retirement age, earned and unearned incomes of both parties, and recipient’s ability to have saves adequately for retirement, and any other factor the court deems relevant.
With regard to those payors retiring early or before full retirement age, it works a little differently. If a payor retired before full retirement age and seeks to terminate his or her alimony obligations, he or she must demonstrate (by a preponderance of the evidence) that the early retirement is reasonable and is made in good faith. The court will then look at a host of factors to determine if the payor’s prospective or actual retirement is being made in good faith. (A payor who seeks to retire at full retirement age, but has an award that predates the new law, is entitled only to a presumption that the retirement is in good faith; he or she still needs to prove it is reasonable under the circumstances.)
The third major change distinguishes self-employed workers from non-self-employed workers when they seek a reduction or termination of alimony. For non-self-employed alimony payors, the alimony award can be modified based either upon changed circumstances, or upon the nonoccurrence of circumstances that the court found would occur at the time of the award. The court may modify the amount of such an award, but shall not modify the length of the award except in unusual circumstances. On the other hand, for self-employed alimony payors who seek a modification of alimony because of involuntary reduction in income since the date of the order from which modification is sought, the payor’s application for relief must include an analysis that sets forth the economic and non-economic benefits that party receives from the business, and which compares these economic and non-economic benefits to those that were in existence at the time of the entry of the alimony award.
The fourth major change is that the new statute specifies that 90 days of involuntary unemployment is sufficient to give the court authority to modify or terminate alimony. Before this change, it was, quite frankly, a shot in the dark as to whether a payor could prove a sufficient time of unemployment in order to modify alimony.
Lastly, the new statute changed the burden of proving the alimony recipient’s co-habitation as a means to terminate alimony. The law remains that alimony may be terminated if the recipient co-habits in a marriage-like relationship with another person. Now, however, co-habitation does not require maintenance of a single common household. It means that a payor no longer needs to guess if his or her ex-spouse is actually sharing a house together with their paramour, and no longer needs to watch his or her ex-spouse’s house to track the comings and goings of a paramour. Now, a payor can show cohabitation by proving things like share financial responsibility for living expenses, mixed or commingled finances, and recognition of the relationship in the couple’s social and family circles. One of the first go-to sources of information these days are Facebook and other social media. There’s a good bet that the ex-spouse will ramble or rave about their new relationship and the progress of that relationship – all that may be needed is a good printer to save the screen shots for the court’s review later on.
This is a simple overview. As always, every case is different. Factors that are critical in one case may be meaningless in another. The best course of action is to consult with legal counsel for an individualized analysis of your case.