New Jersey Alimony, Part 1

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.

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.

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 (See Finances and Divorce for Men).

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.

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.

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.

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.

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-wives 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.

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 court 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.

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.

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.

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.