New Jersey amended its alimony law in September 2014. One of the amendments addressed when someone who is paying alimony is able to terminate their alimony and retire.This portion of the law is N.J.S.A. 2A: 34-23(j). An individual is required to file an application with the Court to seek a termination of his/her alimony obligation. This application can be filed at the time of retirement or if an individual is planning retirement. I recommend filing prior to retirement, if possible, so that you can adequately prepare financially for retirement. If the individual has not yet retired, the Court will set conditions for the individual to meet prior to the termination of alimony (and retirement).
Specifically, the law states that there is a rebuttable presumptive that alimony is terminated when the obligor retires and he/she has reached full retirement age, which for individuals retiring right now is age 67. The rebuttable presumption may be overcome by the ex-spouse who is receiving alimony. There are 11 factors that the Court considers when determining if the ex-spouse overcomes the rebuttable presumption are:
(1) The ages of the parties at the time of the application for retirement;
(2) 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;
(3) The degree and duration of the economic dependency of the recipient upon the obligor during the marriage or civil union;
(4) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;
(5) The duration or amount of alimony already paid;
(6) The health of the parties at the time of the retirement application;
(7) Assets of the parties at the time of the retirement application;
(8) Whether the recipient has reached full retirement age as defined in this section;
(9) Sources of income, both earned and unearned, of the parties;
(10) The ability of the recipient to have saved adequately for retirement; and
(11) Any other factors that the court may deem relevant.
If the Court agrees with the ex-spouse and determines that the presumption has been overcome, then the Court will conduct a second inquiry and apply the 14 alimony factors (can we have a link that brings the reader to the 14 factors?) set forth in an earlier section of the law, N.J.S.A. 2A: 34-23(b), to determine the parties’ current financial circumstances and whether a modification or termination of alimony is appropriate.
One of the factors that will be specifically considered by the Court are the assets distributed between the parties at the time of the entry of a final judgment of divorce or dissolution of a civil union. For instance, if at the time of the final judgment of divorce an ex-spouse receives a sum of money, a house with significant equity, a 401K, a portion of a pension, or other retirement account or assets, these assets will be specifically considered by the court when determining if the ex-spouse has a need for alimony, including any income earned on these assets or if the ex-spouse may use the principal of these assets to support him/herself.
The 14 factors referred to above and set forth in N.J.S.A. 2A: 34-23(b), are:
- The actual need and ability of the parties to pay
- The duration of the marriage
- The age, physical and emotional health of the parties
- The standard of living established in the marriage and the likelihood that each party can maintain a reasonably comparable standard of living
- The earning capacities, education levels, vocational skills, and employability of the parties
- The length of absence from the job market of the party seeking maintenance
- The parental responsibilities for the 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 or non-financial contributions to the marriage by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities
- 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
- The income availability to either party through investment of any assets held by that party
- 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
- The nature, amount, and length of pendente lite support paid, if any
- Other factors the Court may deem relevant. If you have an alimony matter and need to know your rights and/or responsibilities either as the party trying to retire or the one affected by a retirement, please contact an experienced attorney at Adinolfi & Packman, P.A. to find out your legal rights.