Upcoming Changes in New Jersey Alimony 2013
The Status of Permanent Alimony – October 2013
UPDATE ON THE PERMANENT ALIMONY REFORM BILL
There is a movement afoot to eliminate permanent alimony. Pending in the New Jersey State Legislature is a bill A3909 to revise alimony laws including eliminating permanent alimony and establishing guidelines for the amount and duration of alimony awards. This was introduced March 7, 2013.
The alimony reform bill to address reform of permanent alimony, which was to take effect on October 1, 2013, is still in committee. The Judiciary Committee is reviewing the matter and there likely will be no decision until after elections at the earliest.
Without the legislative reform establishing clear guidelines, alimony is an issue that requires extensive analysis and fact finding to reach a fair compromise. Case law touches upon issues such as length of the marriage, age, education, prior work history, child care, health, ability to pay, available assets, which all come into the analysis and discussion as to whether alimony is due, how much and for how long.
It is very important that you have knowledgeable counsel to represent you on alimony and support issues. Tanya Helfand of Schenck Price has handled divorces for over twenty years. Tanya Helfand has settled numerous divorces and represented clients through trial, if necessary.
CASE LAW FOR PERMANENT ALIMONY
At the opposite side of the issue, on August 8, 2013, in the case Gnall vs. Gnall the Appellate Division declared that a fifteen year marriage is not short term. This case indicates that a 15 year marriage makes a party eligible for permanent alimony. This is now a precedent unless the legislature passes the proposed bill to revise alimony laws.
If the bill passes, the new statute will supersede the Gnall case. There would still be limited duration alimony, rehabilitative alimony, and reimbursement alimony. Under the proposed bill, in cases of limited duration alimony, the alimony award will not exceed the recipient’s need or 30 to 35 percent of the difference between the parties gross income established at the time of the initial award. As contrasted with the Gnall case, the new statue proposes that if the duration of the marriage or civil union is 15 years or less, but greater than 10 years, the term of alimony would be a maximum of 70 percent of the number of months of the marriage or civil union.
Statutory Law vs. Case Law
There is a difference between statutory law and case law. Statutory law is decided by the legislature or other government agencies. Under case law, new “rules” are created through decisions made by judges as in the Gnall case.
Many factors are considered for an alimony award. The Gnall case in addition to setting 15 years as a benchmark for permanent alimony also addressed the fact that the wife had certain disabilities as well as high past earnings. The court also acknowledged that she gave up her career to raise the children. Further, the husband’s income was very high allowing him to continue paying for a luxurious lifestyle that the wife was not expected to achieve. The Gnall court also agreed that the wife had an obligation to contribute to her own and the children’s support and ordered that an effective date to impute income to the wife had to be established after consideration of the time and cost of the Plaintiff’s retraining.
The proposed new bill identifies certain events to be used to determine alimony. The bill would eliminate permanent alimony awards and establish guidelines.
Key points of the bill:
(1) If the duration of the marriage or civil union is five years or less, the term of alimony would be a maximum of one-half the number of months of the marriage or civil union;
(2) If the duration of the marriage or civil union is 10 years or less but greater than five years, the term of alimony would be a maximum of 60 percent of the number of months of the marriage or civil union;
(3) If the duration of the marriage or civil union is 15 years or less but greater than 10 years, the term of alimony would be a maximum of 70 percent of the number of months of the marriage or civil union;
(4) If the duration of the marriage or civil union is 20 years or less but greater than 15 years, the term of alimony would be a maximum of 80 percent of the number of months of the marriage or civil union;
(5) If the duration of the marriage or civil union is greater than 20 years, the court would have discretion to award alimony for an indefinite length of time.
The court would be permitted to deviate from these durational limits in the interests of justice and would be required to make specific findings on the evidence setting out the reasons for deviation.
The bill would also provide that the amount of a limited duration alimony award should generally not exceed the recipient’s need or 30 to 35 percent of the difference between the parties’ gross incomes. A court would be permitted to deviate from this guideline upon a written finding that deviation is necessary. Additionally, the court would be permitted to attribute income to either party when it finds that the party is voluntarily underemployed or unemployed. This is currently done under case law. Income is imputed to a party who is voluntarily underemployed or unemployed.
Under current law, limited duration alimony may be modified based on changed circumstances or upon the nonoccurrence of circumstances that the court found would occur at the time of the award. The court may modify the amount of the award but not the length of the term except in unusual circumstances.
The bill would additionally permit suspension, modification, or termination of a limited duration alimony award in the event the recipient establishes a cohabitation relationship with another person for a continuous period of at least three months. The original alimony award could be reinstated upon termination of the cohabitation relationship but would not extend beyond the termination date of the original order. The bill would provide that limited duration alimony may be modified, suspended, or terminated only if the court finds the cohabitation relationship is characterized by stability, permanency, and mutual interdependence, and if the economic benefit inuring to the payee is sufficiently material to constitute a change of circumstances. In determining whether to modify, suspend, or terminate limited duration alimony, the court would consider whether the parties have intertwined finances including, but not limited to, a joint bank account; whether they share living expenses and household chores; and any other relevant and material factors.
Under current law, alimony terminates upon the death of either party and both permanent and limited duration alimony terminate upon the recipient remarrying or establishing a new civil union; any arrearages that have accrued as of the date of death, remarriage, or establishing a new civil union may not be vacated or annulled.
The bill would provide that alimony would also terminate upon the payor spouse or partner attaining full retirement age when the payor is eligible for the old-age retirement benefit under the federal Social Security act; however, any arrearages that accrued prior to the termination date would not be vacated or annulled. The payor’s ability to work beyond such date would not constitute grounds to extend alimony, but the court would have discretion to extend an alimony award beyond the termination date for good cause shown either when making the initial alimony award or upon a finding of a material change in circumstances supported by clear and convincing evidence.
Additionally, the bill would provide that rehabilitative alimony would not exceed a term of five years. The court would have discretion to extend the term of rehabilitative alimony upon finding that: (1) unforeseen events prevent the payee from being self-supporting at the end of the term; (2) the payee endeavored to become self-supporting; and (3) extending rehabilitative alimony would not constitute an undue burden on the payor.
The bill would also provide that reimbursement alimony could not be modified.
Finally, the bill would permit modification of alimony awards existing on the effective date to conform to the provisions of the bill. Limited duration and rehabilitative alimony awards could be modified to conform to the durational guidelines provided in the bill, and permanent alimony awards could be converted to limited duration alimony awards and modified to conform to the durational guidelines for limited duration alimony. A motion for modification could be brought by either party to the court and the moving party would not need to show a change of circumstances to receive a modification. The bill additionally provides that its enactment would not constitute a change of circumstances for the purposes of modifying the amount of an existing alimony award and it would not permit modification of an award that the parties previously agreed could not be modified. The bill would require that all petitions for modifications in connection with its enactment be brought within two years of the effective date. However, nothing in the bill would be deemed to affect the right to modification of any alimony award based on a change of circumstances.
A divorce is a major emotional and financial turning point. Tanya Helfand of Schenck Price focuses primarily on divorce and related matters. If the legislature passes the bill there will be significant effects on divorce litigant’s expectations. The bill as it stands would permit modification of alimony awards existing on the effective date to conform to the provisions of the bill providing that the party’s property settlement agreement does not contain clauses preventing modification.