Results achieved in prior matters are not meant to be a guarantee of success as the facts and legal circumstances vary from matter to matter.
Alimony is the financial support that a spouse may pay or receive once a divorce is finalized. Alimony is gender neutral, meaning that a husband may have to pay his ex-wife and vice versa. It is also generally tax-deductible for the spouse making the payments and taxable income to the spouse receiving the payments. The spouse that receives the alimony payment is typically the individual that was financially dependent on his or her spouse throughout the course of the marriage. The purpose of alimony is to provide the dependent spouse with a level of support that will allow him or her to live a lifestyle reasonably comparable to that enjoyed during the marriage. As a result, alimony is oftentimes a contentious and difficult aspect of the divorce process.
All types of alimony awards aside from reimbursement alimony are generally subject to modification after a divorce upon showing a substantial change in circumstances. Payments may be modified if a substantial change in circumstances occurs, including:
New Jersey Law: Under the statute, N.J.S.A. 2A:34-23(b), in determining the amount and type of alimony to award, a Court will consider, among other things:
Pursuant to N.J.S.A. 2A:34-23(b), there are fourteen statutory factors the Court must consider when determining spousal support:
The Court must consider the current financial circumstances of the parties when determining what type if any, spousal support is appropriate. Actual income will be analyzed unless those figures are not available, in which case the Court may impute income to a party. It is important to note that the ability of the parties to earn is what guides the analysis in determining support obligations. In addition, the needs of the receiving spouse are of utmost importance and will be looked at in light of both the lifestyle of the parties as well as the actual budget found on the case information statement.
Pursuant to N.J.S.A. 2A:34-23(b), the term of alimony payments shall not exceed the length of the marriage. Therefore, the duration of the marriage is an important factor when determining the term. The marriage is said to begin on the date of the ceremony. However, the marriage end date is not always clear as couples are often separated for a period of time before filing for divorce.
These are important in determining the employability and earning potential of each spouse. For example, if a former spouse is 70 years old and in poor health, it is more likely a Court will view that spouse as financially dependent on the other spouse, as opposed to a 35-year-old in good health who could more easily secure employment.
The standard of living of the spouses during the marriage will be considered by examining the income and expenses of both parties. Courts have typically characterized the standard of living as modest, average, or lavish and discussed the standard in conjunction with the parties spending habits or desire to save. As such, alimony may be used to ensure that both parties may continue to live in the same manner to which he or she grew accustomed during the marriage.
In assessing the financial circumstances of the parties, the ability to pay alimony, and the financial need to receive alimony, the overall employability and earning potential of each party is key. Because the Courts look at the ability of either spouse to pay rather than his or her actual earnings, the Court may determine that one spouse may still be responsible for supporting the other spouse if that spouse has an increased earning capacity but is voluntarily unemployed or underemployed. For example, individuals who have advanced degrees and strong employment histories will be seen as having high earning capacities.
In cases where one spouse may not have worked for an extended period of time (e.g. as a result of lack of financial necessity, child rearing, disability, or other potential reasons), the length of absence from the job market is a significant consideration. In these cases, the Court may determine that alimony is vital to ensure that the dependent spouse can re-enter the workforce absent undergoing extreme financial hardship.
The parental responsibilities of each spouse are considered in light of the impact that child-rearing can have on a spouse’s time and ability to work.
This factor is important in cases where 1) one spouse acquired an advanced degree during the course of the marriage, or 2) one spouse desires to attend an academic institution or program to increase his or her employability. In the first case, if one spouse was enrolled in an academic program during the marriage for which the supporting spouse contributed in some way, then that spouse may be entitled to Reimbursement Alimony. Next, if a spouse needs or desires to increase his or her skills in order to acquire sufficient employment, the Court will look at the nature and extent of the program to determine the proper alimony award should the other spouse need to support that spouse during that time.
Contributions to the marriage such as homemaking, parental responsibilities, or significant sacrifices so that one spouse could attain his or her current income level, are relevant to the calculation of alimony.
There is a close interdependent relationship between support awards and equitable distribution of property. Courts may look at the financial opportunities that one spouse may have acquired as a result of the equitable distribution of property when determining whether or not alimony is appropriate. In some cases, alimony may not be warranted when the needs of a dependent spouse are satisfied through property distribution.
For purposes of calculating alimony, any income-producing assets, such as investments, is relevant. The gross needs of the parties, as well as their ability to pay, are analyzed under the totality of the circumstances and not solely reliant on either spouse’s salary.
Alimony is tax-deductible to the paying spouse, but taxable income to the receiving spouse. As a result, the Courts will look at the tax impact that alimony has on the financial circumstances of both spouses.
If a pendente lite order has been issued, then the interim support payments are important in determining the final alimony award. Courts may consider whether or not such awards were sufficient or insufficient. In addition, such applications may also provide further evidence of the economic circumstances of the parties.
As knowledgeable and experienced family law attorneys, we may help you and/or a Court craft an appropriate, workable alimony award, as we understand not only the laws governing alimony but the multitude of practical financial issues that both spouses must consider in the context of a divorce. We also understand that life changes after a divorce, often unexpectedly, and, as a result, a Court may revisit the original alimony award made at divorce.
Contact one of our family lawyers today using the Consultation Request form or phone Joe Russell, our Family Law team Chair.
Joseph J. Russell, Jr.
Chair, Family Law Team
Shareholder
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732.759.0931