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Alimony is the money paid by one spouse to the other spouse for that person's support (and not the child's). The longer the marriage and the larger the income disparity between the parties, the more this will be an issue. This is because alimony is designed to allow the spouse receiving alimony to maintain the marital standard of living as close as possible. Alimony payments are taxable to the payee spouse, and tax deductible to the payor spouse. There are several types of alimony and it can be paid before a divorce is final, after or both.
Pendente Lite Alimony
Pendente Lite alimony is the money paid for support before a divorce is final. The purpose is to maintain the status quo of the family lifestyle. The amount paid may be more or less then the final alimony award. In addition, paying pendente lite alimony does not mean that alimony will be paid after the divorce is finalized. This is because a full analysis of each parties financial status takes several months.
Permanent Alimony
Permanent alimony is intended to compensate a spouse for an economic dependence created by the marriage. It is usually not an issue unless the marriage was at least ten years long. However, a ten year marriage does not mean that permanent alimony will be awarded. It's purpose is to allow the supported spouse to continue to live in the lifestyle to which he or she had been accustomed during the marriage to the degree possible. Thus, a frugal lifestyle or one of overspending can create problems. With a frugal lifestyle, less money will be needed to maintain the marital lifestyle. On the other hand, a life style of over spending and high debt will usually leave one spouse with a high amount of marital debt to service which will cut down on the amount of funds available to pay alimony.
Rehabilitative Alimony
Rehabilitation alimony is a short-term award. It enables the former spouse to go back to school, or obtain some type of job training that will enable him or her to re-enter the work force. In many cases, rehabilitative alimony will consist of the husband-spouse paying for the college tuition or the job training expenses for their ex-wife.
Limited Duration Alimony
This type of alimony is also called "term alimony". Limited duration alimony is often awarded when the marriage was less than ten years. There is simply no magic number to determine how long term alimony will be. In some cases, the length of term alimony will be equal to the amount of years of the marriage. In other cases, it will be closer to half of the time of the marriage.
Reimbursement Alimony
A reimbursement alimony award recognizes the financial contributions a spouse has made to the professional training or career development of the other spouse. Therefore, one spouse has made financial and professional sacrifices and thereby enhancing that spouse's future earning capacity. This is very common with high degrees where one spouse was working and supporting the family while the other spouse was going to law school or medical school.
Alimony in Lieu of Other Payments
Sometimes one spouse will owe the other spouse money from a loan, debt or through some other settlement arrangement. Thus, while alimony would not be awarded, the money owed will be called alimony in the settlement agreement. The advantage of this arrangement is that the payments can be made through probation, which usually ensures that the payments will be made. In addition, since it is referenced as alimony, the same tax advantages apply as any other type of alimony. Thus, the party paying the money will gain save money at tax time while the party receiving the money will be confident that the probation department will help ensure that the money is paid on time.
The Alimony Statute
The alimony statute, N.J.S.A. 2A:34-23(b) states that the court must consider the following thirteen factors:
1. The actual need and ability of the parties to pay.
2. The duration of the marriage.
3. The age, physical and emotional health of the parties.
4. The standard of living established during the marriage and the likelihood that each party can maintain a reasonable comparable standard of living.
5. The parties' earning capability, education and employability.
6. The length of absence from the job market.
7. Parental responsibilities for the children.
8. The time and expense needed to acquire education or training to enable a depended spouse to obtain appropriate employment.
9. The financial and non-financial contributions of each spouse to the marriage.
10. Equitable distribution.
11. Income available and non-financial contributions of each spouse to the marriage.
12. The tax consequences of alimony.
13. Any other factor which the court deems relevant.
Earning Capacity
One spouse cannot be forced by the court to get a job. However, if either spouse is unemployed or underemployed, the court will usually impute income. This prevents the spouse paying support from taking a drastic cut in pay in order to avoid paying alimony. It also prevents the spouse receiving support from not going to work in order to receive more alimony. During the divorce process, it is common for the supporting spouse to hire an expert to determine the earning capacity of the spouse that is to receive alimony. It is usually after the divorce process that the supporting spouse attempts to take a lesser job to avoid or reduce alimony. Courts view such a job change with great suspicion.
Changing Alimony After Divorce
Motions to decrease or terminate alimony are very common, especially in cases of permanent alimony. Alimony can be increased as well.
Retirement
If a party retires under the normal circumstances, there is usually no issue. Alimony should be terminated. However, this frequently becomes an issue for people that retire before 65. For example, a police office may retire around 55. Should they be forced to go back to work? What if someone retires at 62 or the retirement was because of a disability or a buyout? In these situations, courts look first to see if the retirement was legitimate or if it was done to avoid alimony. If it was legitimate, courts will then balance the benefit of the retiring party against the detriment of the party who will no longer receive alimony.
Decrease in Income
Most people do not have drastic change in income as they get older. Thus, a supporting spouse who claims a drastic change in income that warrants a decrease or termination of his or her alimony obligation will be viewed with great suspicion by a court. Such a motion must be aggressive, thorough and supported with facts and law.
Consider the case of Walt D. During the divorce, Walt was making over $100,000 a year as a salesman. After the divorce, Walt could only find a job as a waiter making $20,000 a year. He hired an attorney to terminate his alimony and lost. He filed an appeal and the appellate division reduced his alimony. However, he was still paying more than he made in a year. A few years later, Walt hired Jack Venturi Law. Put together a comprehensive motion that successfully terminated Walt's alimony obligation.
Cohabitation
After a divorce, each party is free to create a new romantic relationship. However, a party receiving alimony cannot get remarried or their alimony award will terminate. The solution for some people is to maintain a relationship that is essentially a marriage without the license or the wedding. Thus, the couple is avoiding marriage solely to keep the alimony from being terminated. This is called cohabitation. If the supporting spouse can prove cohabitation, the court will likely terminate the alimony obligation.
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