Why the Date of Your Divorce Agreement Matters When It Comes to Alimony and Retirement
On September 10, 2014 then-New Jersey Governor Chris Christie signed into law the reformed New Jersey alimony statute. Among some of the most significant changes to the alimony statute was the way that it treats the payment of alimony upon the payor reaching retirement age. Under the reformed statute, full retirement age is defined as the age at which a person is eligible to receive full retirement benefits under Section 216 of the federal Social Security Act (42 U.S.C. §416).
Once it is determined that a payor of alimony is at, or approaching, his or her full retirement age, the first thing attorneys must do is look to when the parties’ Marital Settlement Agreement and Final Judgment of Divorce was entered. Specifically, the date in which the judgment of divorce was entered, either before September 10, 2014 or after September 10, 2014, may result in a significant difference in how the payor’s retirement application is treated.
Before September 10, 2014
Subsection j(3) of the New Jersey alimony statute, N.J.S.A. 2A:34-23, controls when a payor can file a retirement application to terminate alimony based on the parties’ Marital Settlement Agreement and Final Judgment of Divorce being dated prior to September 10, 2014. Section j(3) provides the following:
(3)When a retirement application is filed in cases in which there is an existing final alimony order or enforceable written agreement established prior to the effective date of this act, the obligor’s reaching full retirement age as defined in this section shall be deemed a good faith retirement age. Upon application by the obligor to modify or terminate alimony, both the obligor’s application to the court for modification or termination of alimony and the obligee’s response to the application shall be accompanied by current Case Information Statements or other relevant documents as required by the Rules of Court, as well as the Case Information Statements or other documents from the date of entry of the original alimony award and from the date of any subsequent modification. In making its determination, the court shall consider the ability of the obligee to have saved adequately for retirement as well as the following factors in order to determine whether the obligor, by a preponderance of the evidence, has demonstrated that modification or termination of alimony is appropriate:
(a)The age and health of the parties at the time of the application;
(b)The obligor’s field of employment and the generally accepted age of retirement for those in that field;
(c)The age when the obligor becomes eligible for retirement at the obligor’s place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits;
(d)The obligor’s motives in retiring, including any pressures to retire applied by the obligor’s employer or incentive plans offered by the obligor’s employer;
(e)The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution;
(f)The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours;
(g)The obligee’s level of financial independence and the financial impact of the obligor’s retirement upon the obligee; and
(h)Any other relevant factors affecting the parties’ respective financial positions.
(4)The assets distributed between the parties at the time of the entry of a final order of divorce or dissolution of a civil union shall not be considered by the court for purposes of determining the obligor’s ability to pay alimony following retirement.
After September 10, 2014
Alternatively, subsection j(1) controls when a payor can file a retirement application to terminate alimony based on the parties’ Marital Settlement Agreement and Final Judgment of Divorce being dated after September 10, 2014. Section j(1) provides the following:
(1)There shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age, except that any arrearages that have accrued prior to the termination date shall not be vacated or annulled. The court may set a different alimony termination date for good cause shown based on specific written findings of fact and conclusions of law.
The rebuttable presumption may be overcome if, upon consideration of the following factors and for good cause shown, the court determines that alimony should continue:
(a)The ages of the parties at the time of the application for retirement;
(b)The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award;
(c)The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;
(d)Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;
(e)The duration or amount of alimony already paid;
(f)The health of the parties at the time of the retirement application;
(g)Assets of the parties at the time of the retirement application;
(h)Whether the recipient has reached full retirement age as defined in this section;
(i)Sources of income, both earned and unearned, of the parties;
(j)The ability of the recipient to have saved adequately for retirement; and
(k)Any other factors that the court may deem relevant.
If the court determines, for good cause shown based on specific written findings of fact and conclusions of law, that the presumption has been overcome, then the court shall apply the alimony factors as set forth in subsection b. of this section to the parties’ current circumstances in order to determine whether modification or termination of alimony is appropriate. If the obligor intends to retire but has not yet retired, the court shall establish the conditions under which the modification or termination of alimony will be effective.
As can be seen from a review of the statutory factors under subsections j(1) and j(3), there are several differences in the court’s consideration of an application to modify or terminate alimony based on retirement, including but not limited to:
- A rebuttable presumption that alimony shall terminate upon the payor reaching full retirement age, placing the burden on payees to demonstrate good cause and upon an analysis of the factors in j(1) (situations after September 10, 2014);
- A consideration of the ability of the payee (recipient) of alimony to have saved adequately for retirement (situations before September 10, 2014); and
- A payor’s burden to demonstrate by a preponderance of the evidence (meaning, it is more likely than not) that alimony termination or modification is appropriate when considering the factors in j(3) (situations before September 10, 2014).
Taken together, each client’s post-divorce case is unique and fact sensitive. It is important for every post-divorce client to understand all possible and available remedies under the current New Jersey alimony statute when assessing alimony obligations as retirement age approaches. For more information regarding effective and efficient representation and guidance through divorces in New Jersey contact the Law Office of Lyons & Associates. At the law office of Lyons & Associates, we represent adoptive parents throughout New Jersey. We place a premium on personalized service and attention. For a private consultation, contact us by e-mail, view our website at www.lyonspc.com, or call our office at 908-575-9777.
By: Marissa A. Del Mauro, Esq.