New Jersey alimony has recently undergone a major reform that may affect your divorce if you are eligible to receive or pay spousal support. Family lawyer Cipora Winters explains how a judge determines the amount and duration of alimony, discusses the role of life insurance in securing ongoing alimony payments, and outlines how the newly reformed statute can influence alimony determinations for divorcing people in New Jersey.
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Divorce Magazine Podcast: New Jersey Divorce Lawyer Cipora Winters on Alimony Law & Reform in New Jersey
Hosted by: Diana Shepherd, Editorial Director, Divorce Magazine
Guest speakers: Family Lawyer – Cipora Winters. A partner at Keith, Winters & Wenning, LLC, Cipora Winters has been exclusively practicing family and matrimonial law for almost 20 years in New Jersey and New York. She has the knowledge and experience to help divorcing individuals in the face of complex circumstances. For more information about Cipora or her firm, please visit www.kwwlawfirm.com.
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What is the difference between spousal support, alimony, and maintenance?
They are essentially different names for the same thing. In New Jersey, we usually refer to it as alimony.
How does a judge determine if someone qualifies to receive alimony? What factors are taken into consideration?
Our statute provides 14 factors that a court is supposed to review and address in determining alimony. These factors include the health of the parties, the ages of the parties, their respective parenting responsibilities, and the amount of time and cost it may take for a party to become educated in a new field of work. The primary factor the court considers in calculating and determining alimony is the amount of income earned by each party – but more than that, the disparity between the parties, the length of the marriage, and the standard of living during the marriage.
Do men ever receive spousal support?
Men do receive spousal support, particularly when there is income disparity between the wife and the husband. If the wife has been the traditional breadwinner and there is a significant income disparity between the wife and the husband, then the husband would qualify for alimony.
If a couple has been living together in a long-term relationship but never formalized it with a marriage, is one partner eligible to receive alimony when the relationship breaks down?
Only if they had put an agreement in writing that one partner would pay the other partner alimony. There used to be a concept of common-law marriage in New Jersey, where if a couple was together for a long time, held themselves out to the public as a couple, and had all the hallmarks of a married couple – they lived together, socialized together, and shared a division of activity in the relationship where one was primarily the breadwinner and the other took care of the home or children – there would be a concept of alimony in that situation. Very recently, New Jersey decided there would no longer be common-law marriages and no compensation for a common-law marriage-type relationship by way of alimony or spousal support. There would only be financial compensation by way of support if there were an agreement in writing between the parties stating that their relationship gave rise to that type of financial compensation.
Financial compensation is not required when unmarried partners break up, but would this be true even if one partner had given up advancement or dropped out of college to put the other through medical school?
Absolutely. It sounds unfair to some degree, but the judiciary and the legislator believe that people in this day and age are more educated regarding relationships and what can result of them. If parties enter a relationship where they elect to avoid the tradition of marriage, they should know there will only be financial responsibilities if they put it in writing.
Is the party who is paying alimony expected to keep making payments if their ex-spouse moves in with a new romantic partner?
That's a good question and one of my favorite areas of the law. To use traditional gender roles: if the wife is receiving alimony and she moves in with a boyfriend, should her ex-husband continue to pay alimony while the wife is cohabitating?
There's a long line of fascinating cases in New Jersey about women deserving alimony because they have a husband in their lives who should support them. If a woman replaces the ex-husband with someone who is her husband in every respect except for a marriage certificate, should she now be supported by two husbands – her ex-husband who's paying her alimony and her new husband-like character who she's living with?
The law says it's not about the romantic relationship; we have to look at whether the woman is receiving a financial benefit from her cohabitation. If the new person in her life is supporting her, then she should not receive the same amount of alimony that her ex-husband has been contributing; and if the wife is now supporting a new boyfriend with her husband's alimony, that doesn’t align with the purpose of the ex-husband paying alimony. The court would do a very detailed financial analysis of the financial interdependency of the ex-wife and the person with whom she is cohabitating. Alimony would be reduced, modified, or terminated if there were a financial interdependency.
Several months ago, New Jersey issued an alimony reform statute that reflects many changes and advancements in alimony. The statute has a brief coda on cohabitation and says that a court can suspend or terminate alimony when a party cohabitates after divorce. We're waiting for judges to issue the first decisions based on the new statute to see if they'll continue to modify alimony based on financial interdependency, or if the judiciary now believes it only has the power to terminate or suspend alimony in a cohabitation situation. It's a new development in the law and we're all looking forward to seeing how it progresses.
Does alimony end upon remarriage?
If the paying spouse remarries, there is no difference in the alimony payment. If the recipient spouse remarries, then alimony terminates as of the remarriage.
Can you tell us more about the new alimony reform statute in New Jersey? What are the major changes affecting divorcing couples?
The major change in the new statute refers to the duration of alimony. New Jersey has always had a very broad approach to alimony with 14 statute factors influencing how alimony should be computed, including the age of the parties, the health of the parties, the disparity in income, the length of the marriage, and the standard of living during the marriage. None of those factors are formulaic, so every alimony case was unique and could go in any direction.
The new statute provides guidance and boundaries for the duration of alimony. It explains that for a marriage of less than 20 years, the duration of alimony cannot exceed the number of years of the marriage. If you've been married for five years, you'll be paying alimony for zero to five years but no more than five years; if you've been married for ten years, you can pay alimony for zero to ten years but no more than ten years. The formula is really helpful within the realm of alimony.
Sometimes divorce can take a long time, whether there are custody issues that require a delicate approach or complex issues regarding businesses valuations that can take a lot of time. There were situations in which spouses were paying or receiving alimony for the duration of the divorce process and did not get a credit for those payments following the divorce. The new statute explains that when alimony is calculated, the paying spouse should receive a credit for what we call pendente lite support – which means that support paid during the pendency of the action should be credited against the final alimony number.
The third and more important part of the new reform statute provides that once somebody retires at their good faith retirement age, which is presumptively when they receive Social Security, alimony should terminate. New Jersey not only received a new termination ceiling on the length of alimony for any marriage under 20 years - the maximum duration of alimony is the duration of the marriage - but also received a ceiling for how long should alimony be paid, which is until the presumptive retirement age.
There are various factors built into the statute that a court can review, and a court can change the guidelines in exceptional circumstances. The fact that the new statute provides these guidelines is not only helpful to attorneys and helpful to their clients, but also helpful to people who want to go through the divorce process without hiring expensive attorneys. Alimony computation is now more formulaic than ever, which is helpful for parties who want to address the divorce quickly and quietly themselves.
Is alimony always modifiable? If so, under what circumstances can it be modified?
Alimony can be modified when any party undergoes or experiences a change in circumstances that impacts the alimony calculation. If one party starts to earn a great deal more or less than they were at the time the alimony was computed or if one party suffers an unfortunate accident or illness that prevents them from working, then alimony can be changed. Alimony can also be revisited if there's a change in the parties’ parenting situation.
Alimony is generally modifiable, but there are circumstances in which the divorcing parties decide that their alimony will be non-modifiable and build it into their divorce agreement. They can make it non-modifiable in exchange for other considerations and the agreement will be upheld in court. The general law is that alimony can be modified upon significant changes to health issues or financial circumstances.
What can the recipient spouse do to protect against the alimony payments ending with the payor’s disability or death?
We try to build a life insurance component into the agreement. There should be a life insurance policy in place so that if the paying spouse passes away, the recipient spouse is assured he or she will receive a lump sum payment that reflects the amount of alimony owing.
Protecting against the loss of alimony to a disability is more complex. Many divorcing people did not have disability insurance during their marriage; it was not part of their standard of living, and it's not something a spouse will agree to obtain and pay for following a divorce. If an ex-spouse is ordered to pay alimony and must pay a life insurance premium to protect against their potential death so that the recipient spouse can receive a life insurance benefit to cover the future projected alimony, it would be very difficult to also have them obtain and pay for disability insurance.
Unfortunately, an accident could happen to either spouse and would present a circumstance by which either party could seek a modification of alimony. One option for the recipient spouse is to bargain for a non-modifiable alimony amount, which could mean accepting a little less for the security of receiving it irrespective of a potential disability. Another option is to have the paying spouse apply for disability insurance and then pay for the policy yourself to guarantee your own future income stream, even if you have to pay for it in the years that your ex-spouse is healthy.
Under what conditions might the judge order permanent alimony?
Under the new statute with the alimony reform, the term permanent alimony has been eliminated and replaced with the phrase open duration alimony. It is only for marriages of 20 years or longer. If a marriage is 20 years or longer, it is presumptively an open duration alimony situation.
The statute has a slew of provisions whereby a court could potentially consider an open duration alimony situation in other circumstances – but those circumstances would have to be very extreme. For example, someone who is disabled and had been supported by their wealthy ex-spouse who will continue to have financial resources post-divorce; or an elderly couple that was married for close to a full 20 years and had a very traditional marriage where the wife was a stay-at-home mother who did not develop any degree of employability or skills that can translate into the workforce - those are situations where a court might be inclined to award open duration alimony for a marriage of less than 20 years.
New Jersey is currently looking to the judiciary for how they will interpret the newly reformed statute. We're curious as to whether judges are going to apply open duration alimony to marriages of less than 20 years or if they're going to apply it very sparingly and in limited circumstances other than in marriages of 20 years of more. I anticipate that it will be applied sparingly. The nature of the alimony reform statute was to provide some degree of formulaic certainly to the calculation of alimony; judges will not want to create ambiguity by wholesale application of open duration alimony to marriages under 20 years.
Certified Divorce Financial Analyst
Business Valuators / CPAs