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MY THOUGHTS ON NEW JERSEY’S ALIMONY REFORM LAW
By Robert A. Loefflad, Esquire
Serving Atlantic and Cape May Counties
On September 10, 2014, Governor Chris Christie signed into law new legislation reforming New Jersey’s alimony laws. The new law takes effect immediately.
This article is intended to give a brief overview of the various changes to the alimony laws and how it may affect future divorce cases and current alimony payors. Since the law was only adopted recently, there is little case law interpreting or enforcing the new provisions. So, the opinions offered in this article are my mine alone.
The major changes to the law are as follows:
PERMANENT ALIMONY REPLACED BY “OPEN DURATIONAL ALIMONY.” Under the old alimony statute, courts had the option of awarding permanent alimony, limited duration alimony, rehabilitation alimony or reimbursement alimony. Permanent alimony continued for an indefinite period of time; limited duration alimony lasted for a finite number of years; rehabilitation alimony generally lasted for a finite number of years and was intended to allow the dependent spouse time to obtain new education or job training to reenter the workforce; and reimbursement alimony was intended to reimburse a spouse for contributions made to the other spouse’s education or employment during the marriage, the classic example being where one spouse supports the other while he/she attends medical school.
Under the new alimony statute, “permanent alimony” has been eliminated and replaced with “open durational alimony.” In my view, this change is merely a matter of semantics. Ever since the New Jersey Supreme Court’s decision in Lepis v. Lepis, 83 N.J. 139 (1980), alimony awards have always been subject to modification based on substantial changed circumstances. So, in this sense, the term “permanent alimony” has always been a misnomer. It was extremely rare that an alimony award would actually last forever. Normally, the alimony award would be modified or eliminated based on retirement, disability, job loss, remarriage of the dependent spouse, etc.
DURATION OF ALIMONY. For any marriage lasting less than 20 years, the new alimony statute limits the duration of the alimony award to the length of the marriage. For example, if your marriage lasted 10 years, the alimony award generally cannot exceed 10 years.
However, the law permits the alimony award to exceed the length of the marriage in exceptional circumstances. The statute sets forth a number of factors for the court to consider in determining whether exceptional circumstances exist.
In my view, the most common circumstance under which a party may be required to pay alimony for a duration exceeding the length of the marriage is where one spouse suffers from a disability or chronic illness. The courts historically have been very reluctant to render one spouse a “ward of the state” (i.e. dependent on public assistance benefits) where the other spouse has the ability to provide a sufficient level of support.
Otherwise, I think the courts will adhere fairly strictly to the new durational limits prohibiting alimony from exceeding the length of the marriage.
AMOUNT OF ALIMONY. During debate of the new alimony law, there were some discussions about limiting the amount of alimony to a certain percentage of the income differential between the two parties. However, such a provision did not make it into the new law. Accordingly, the new alimony law does NOT limit the amount of an alimony award.
However, the new law does make one change which has not received a lot of press attention, but, which I think will impact how courts set the amount of alimony. Under the old law, the dependent spouse was entitled to receive sufficient support so that he/she could maintain a standard of living similar to what he/she enjoyed during the marriage. The old law did not explicitly consider the payor spouse’s ability to maintain a certain standard of living.
Under the new law, each spouse has an equal right to maintain a standard of living similar to the marriage. Specifically, the new law states, “the court shall also consider the practical impact of the parties’ need for separate residences and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living established in the marriage or civil union, to which both parties are entitled, with neither party having a greater entitlement thereto.
RETIREMENT. Under the old alimony law, there were no specific provisions regarding the termination of alimony upon retirement. However, New Jersey courts generally recognized that retirement was a substantial change of circumstances warranting a reduction or termination of alimony. See Sylvan v. Sylvan, 267 N.J. Super 578 (App. Div. 1993) and Deegan v Deegan, 254 N.J. Super 350 (App. Div. 1992). In these circumstances, the courts adopted a variety of factors to consider whether to reduce or terminate alimony.
The new alimony law creates a “rebuttable presumption” that alimony will terminate upon the payor spouse attaining normal retirement age. This rebuttable presumption may be overcome upon a showing of good cause. The new statute lists a variety of factors for the court to consider when deciding whether the presumption has been overcome. Again, in my view, the most important factor will be whether either spouse suffers from a disability or chronic illness.
EARLY RETIREMENT. If a payor spouse seeks to retire before normal retirement age, the new statute requires the payor spouse to demonstrate by a “preponderance of the evidence” that early retirement is “reasonable and made in good faith.” In other words, there is no presumption one way or the other, but the payor spouse will have the burden of showing that modification or termination of alimony is justified under the circumstances.
LOSS OF EMPLOYMENT. The old alimony law provided no guidelines for the reduction or termination of alimony in the event the payor spouse lost his/her job or suffered a reduction of income. Courts generally required the payor spouse to make good faith efforts to find another job or to replace the lost income. The payor spouse would also need to show the reduction of income was permanent and not temporary. Some courts would require the payor spouse to wait one year or more before making an application to reduce or eliminate an alimony obligation; otherwise, the payor spouse would not be able to show that he/she used good faith efforts to find new employment or that the reduction of income was permanent.
The new alimony statute establishes firm guidelines for determining whether alimony should be reduced or eliminated based on a job loss. Again, the statute sets forth a variety of factors for the court to consider. However, the most significant provision states, “The court shall determine the application based upon all of the enumerated factors, however, no application shall be filed until a party has been unemployed, or has not been able to return to or attain employment at prior income levels, or both, for a period of 90 days. The court shall have discretion to make any relief granted retroactive to the date of the loss of employment or reduction of income.”
Historically, courts would only modify spousal support awards retroactive to the date the payor spouse filed his/her motion for modification. The new statute makes clear that the court can make such orders retroactive to the date of unemployment or loss of income.
COHABITATION. Remarriage of the dependent spouse has always been grounds for termination of alimony. However, the issue of cohabitation without remarriage has been the source of a significant amount of litigation. The new statute makes clear, “Alimony may be suspended or terminated if the payee cohabits with another person. Cohabitation involves 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 statute provides a slew of factors to consider to determine whether cohabitation has been established which merely codifies existing case law. However, the statute goes beyond existing case law by stating “In evaluating whether cohabitation is occurring and whether alimony should be suspended or terminated, the court shall also consider the length of the relationship. A court may not find an absence of cohabitation solely on the grounds that the couple does not live together on a full-time basis.”
In sum, with regard to the cohabitation issue, the most significant changes are (1) cohabitation may be established even when the parties do not live together on a full-time basis, and (2) where cohabitation is established, alimony may be terminated or suspended. New Jersey case law has always held that alimony may be terminated upon a showing of cohabitation; but, there has always been an open question whether alimony may be reinstated if the cohabitation ends. The new alimony law implies that alimony may be reinstated if the dependent spouse ceases cohabitation.
In many respects, the new alimony law merely codifies existing case law and does not represent a significant change in alimony law in the State of New Jersey. However, I do believe it represents a movement toward less onerous alimony awards and a greater liberality in reducing or terminating alimony awards. In sum, I think it will affect how courts establish and enforce alimony awards and will bring a greater uniformity in awards throughout the State.
If you are involved in a divorce or family law matter in the State of New Jersey feel free to contact Robert A. Loefflad, Esquire, of the Law Firm of Ford, Flower, Hasbrouck & Loefflad.
Before making your choice of attorney, you should give this matter careful thought. The selection of an attorney is an important decision.
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