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Spousal Support/Alimony

In New Jersey the law governing spousal support changed in 2014 with the Amendment of the Alimony Act. A shift in the law and subsequent cases more nearly equalizes the rights of divorcing spouses to both be able to live the former marital lifestyle and if it is not possible, both spouses will have to reduce their lifestyle.

The situation in which a supported spouse received alimony paid by an obligor who is impoverished paying this burden, has been changed. This usually was the case in which the husband was paying alimony to a dependent wife.

“Permanent” alimony has been eliminated. A Court can now order open durational alimony similar to permanent alimony (no defined end); rehabilitative alimony (to help a person get on his/her feet); limited duration alimony (a defined term of alimony) or reimbursement alimony (generally if you have deferred your own career to help the other spouse or paid for other spouse’s education) to either party.

It is based on the following factors:

“In all actions brought for divorce, dissolution of a civil union, divorce from bed and board, legal separation from a partner in a civil union couple or nullity the Court may award one or more of the following types of alimony: OPEN DURATIONAL alimony; rehabilitative alimony; limited duration alimony or reimbursement alimony to either party. In so doing, the Court shall consider, but not be limited to, the following factors:

(1)       The actual need and ability of the parties to pay;

(2)       The duration of the marriage or civil union;

(3)       The age, physical and emotional health of the parties;

(4)       The standard of living established in the marriage or civil union and the

likelihood that each party can maintain a reasonable comparable standard

of living; WITH NEITHER PARTY HAVING A GREATER ENTITLEMENT

TO THAT STANDARD OF LIVING THAN THE OTHER;

(5)       The earning capacities, educational levels, vocational skills, and employability of the parties;

(6)       The length of absence from the job market of the party seeking

maintenance;

(7)       The parental responsibilities for the children;

(8)       The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;

(9)       The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or education opportunities;

(10)     The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;

(11)      The income available to either party through investment of any assets held by that party;

(12)     The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment;

(13)     THE NATURE, AMOUNT, AND LENGTH OF PENDENTE LITE SUPPORT PAID, IF ANY; AND

(14)     Any other factors which the court may deem relevant.

IN CASES WHERE THE COURT IS ASKED TO MAKE AN AWARD OF ALIMONY, THE COURT SHALL CONSIDER AND ASSESS EVIDENCE WITH RESPECT TO ALL REVELVANT STATUTORY FACTORS. IF THE COURT DETERMINES THAT CERTAIN FACTORS ARE MORE OR LESS RELEVANT THAN OTHERS, THE COURT SHALL MAKE SPECIFIC WRITTEN FINDINGS OF FACT AND CONCLUSIONS OF LAW ON THE REASONS WHY THE COURT REACHED THAT CONCLUSION. NO FACTOR SHALL BE ELEVATED IN IMPORTANCE OVER ANY OTHER FACTOR UNLESS THE COURT FINDS OTHERWISE, IN WHICH CASE THE COURT SHALL MAKE SPECIFIC WRITTEN FINDINGS OF FACT AND CONCLUSIONS OF LAW IN THAT REGARD.

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.”

There are certain circumstances which may require an adjustment to the duration of alimony, not limited to illness, parenting a small child, or other reasons. For any marriage of less than 20 years of duration, alimony will not be ordered for longer than the length of the marriage.

TAXES

A “new tax rule” applies to those who get divorced or sign a separation agreement in 2019. The spouse paying alimony will no longer be able to deduct the support from his or her gross income in arriving at a taxable income. For the alimony recipient the payment will be tax free.

Agreements entered before 2019 for alimony will receive the usual tax treatment being deductible by the payor and reportable by the recipient.

MODIFICATION

Provisions have been made in the amended alimony statue for modification of alimony. A key concept is that if there is a significant downward change in the payors circumstances, alimony will be modified in accord with the present circumstances.

Alimony may be modified based on the prospective or actual retirement of the obligor. New circumstances have been identified to specifically address modification of alimony.

Alimony may be terminated upon cohabitation of the payee spouse. The Court may not find an absence of cohabitation solely based on grounds that the couple does not live together on a fulltime basis.  The Courts also will consider a change after a shorter period than was previously allowable.

EVIDENCE OF INCOME

The application of the new statute for a new divorce filing requires evidence of the earning capabilities of each of the parties. In cases of wage earners, tax returns and pay records are used to determine the income of the parties. If one spouse has not worked, income will be imputed.

Based upon a person’s education and skills, income can be imputed by reference to Department of Labor Statistics. In some cases, employability experts are used to guide the court as to how much income should be imputed.

For people who are entrepreneurs and professionals with their own practices it is often necessary for a forensic accountant to be utilized to evaluate the business income and earnings. In these cases there is more opportunity to report expenses so that net income is adjusted. The true income must be determined for the case.  The parties or the court can assign one forensic accountant or each party may hire his/her own.

The establishment of fair alimony when needed is critical for the future after the divorce. Most of the time the former standard of living cannot be maintained because now there are two households.

Accurate records and good faith disclosure help resolve the issue of alimony and contain costs of the divorce.

For a free half hour consultation call Helfand & Associates at 973-428-0800. Helfand & Associates are experienced matrimonial attorneys, handling all aspects of divorce.

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