Alimony is a periodic payment for support or maintenance that one spouse may be required to pay the other spouse when they are living separate and apart or have been divorced. The supporting party pays alimony as a substitute in lieu of his or her duty of marital support. The general purpose of alimony is to provide the dependent spouse with a level of support and standard of living generally commensurate with the economic quality of living that existed during the marriage.
In all actions for divorce or nullity, there are five types of alimony recognized in New Jersey:
- Pendente lite alimony
- Indefinite duration alimony
- Limited duration alimony
- Rehabilitative alimony
- Reimbursement alimony
Lump sum alimony, also known as alimony “in gross,” is authorized in many states, but not New Jersey. Lump sum alimony can be paid by agreement between the parties. In establishing lump sum alimony, one must be cognizant about present value issues.
Below sets forth the definition of each type of alimony recognizable by a Court:
- Pendente lite alimony: this is an award of periodic support that is obtained during the pendency of the divorce litigation. A court has authority to make a pendente lite Order as the circumstances of the parties and the nature of their case render fit, reasonable, and just.
- Indefinite duration alimony: An allowance of periodic installments without time limitation, but terminable generally upon the death of their party and the remarriage of the recipient and modifiable based upon changed circumstances. There is a rebuttable presumption that indefinite duration alimony is terminable upon the actual retirement of the payor at a date of retirement defined by social security entitlement to full benefit payments and is also terminable on the cohabitation of the recipient. Generally, a party must be married for 20 years to qualify for indefinite duration alimony. Absent a marriage of twenty years, the duration of the alimony cannot be longer than the duration of the marriage.
- Rehabilitative alimony: Rehabilitative alimony is generally an award made in cases where a marriage is relatively short and the recipient is capable of full employment based upon experience, additional training, or further education. Rehabilitative alimony is payable for a definite period of time until there can be a reasonable expectation based upon a rehabilitative plan that the spouse will no longer need support.
- Limited duration: Limited duration alimony is alimony that is paid for a specific period of time, which also ends upon the death of the recipient, remarriage or cohabitation with an unrelated person.
- Reimbursement alimony: Reimbursement alimony is paid in the nature of restitution. It is typically awarded to a spouse after a brief marriage with one spouse contributing to the other spouse’s obtainment of a professional degree or license. Under this scenario, no assets exist for an equitable distribution award. The purpose of reimbursement alimony is to provide a fair and effective means of compensating a spouse who has suffered a loss or a reduction of support or who has incurred a lower stand of living or been deprived of a better stand of living in the future as a result of supporting the spouse’s professional education.
How Alimony is Calculated
In determining the amount and duration of alimony, a court considers the following statutory factors:
- Actual need and ability of the parties to pay
- The duration of the marriage
- The age, physical and emotional health of parties
- Standard of living established in the marriage and the likelihood that each party can maintain a reasonably comparable stand of living
- The earning capacity, education level, vocational skills, and employability of the parties
- The length of absence from the job market and custodial responsibilities of the parties seeking maintenance
- Parental responsibility for children
- 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
- The history of the financial and non-financial contributions to the marriage by each party, contributions to the care and education of the child and interruption of personal careers or educational opportunities
- The equitable distribution of property ordered in any payment of equitable distribution directly or indirectly from current income, to the extent that such consideration is reasonable just and fair
- The income available to either party through investment of all assets held by the party
- The tax treatment and consequences to both parties of any alimony awards, including the destination of or a portion of the payment as a non-taxable payment
- Any other factors the court may deem relevant
Marital fault is irrelevant except in cases where the fault has had an economic impact or where the fault so violates societal norms that continuing economic bonds between the parties confound notions of simple justice.
Equitable Distribution and Property Settlement Agreements
Most matrimonial disputes are settled by way of the entry of a Marital Settlement Agreement, also known as a Property Settlement Agreement. The Agreement is thereafter incorporated into the Final Judgment of Divorce after the Court has satisfied itself that the Agreement was entered into voluntarily and generally with legal advice. A Property Settlement Agreement requires adequate discovery and comprehensive legal advice concerning all aspects of the case, including tax implications and careful draftsmanship. The Property Settlement Agreement should identify the assets and income and set forth the values as well as the allocations between the parties. Baseline should be drafted for purposes of having a basis to evaluate modification implications later concerning changes in circumstance. In connection with the division of the property itself, the parties should identity and distinguish the assets subject to equitable distribution from the assets that are not eligible for equitable distribution and determine the basis for inclusion/exclusion. In affording a division of the assets, the parties shall be guided by the statutory factors set forth in N.J.S.A. 28:34-23.1, which are as follows:
- The duration of the marriage
- The age and physical and emotional health of the parties
- The income or property brought to the marriage by each party
- The standard of living established during the marriage
- Any written agreement made by the parties before or during the marriage concerning an arrangement of property distribution
- The economic circumstances of each party at the time division of property become effective
- The income and earning capacity of each part include education, training, employment skills, work experience, length of the absence from the job market, custodial responsibility for children and the time and expense necessary to acquire sufficient educational training to enable to party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage
- The contribution of each party to the education, training or earning power of the other
- The contribution of each party to the acquisition, dissipation, preservation, depreciation, or appreciation in the amount of value of the marital property, as well as the contribution of the party as homemaker
- The tax consequences of the proposed distribution to each party
- The present value of the property
- The need of a parent who has physical custody of the child to own or occupy the marital residence and to use or own the household effects
- The debts and liabilities of the parties
- The needs for creation now or in the future of a trust fund to secure reasonably foreseeable medical or educational costs for spouse or children; any other factors which the court may deem relevant
- The extent to which a party deferred achieving his or her career goals
- Any other factors which the court may deem relevant
Marital fault is not a factor properly considered unless it is egregious fault such as the case of a spouse attempting the murder of the other spouse.
The cut off for inclusion of an asset subject to equitable distribution is determined:
- As of the date of the filing of the Divorce Complaint
- A date agreed upon by the parties
- The separation of the parties in conjunction with the actual division of most of their marital assets