Can I Retire?

            Can I retire?  This is a question most of us are going to ask at some point. Followed by:   When do I want to retire?  Where do I want to retire to?  Have I saved enough to do that?  What is my retirement income going to be?  Divorced couples have an extra question or two.  Such as:  Can I retire and still pay my alimony obligation?  Or, do I still have to pay my alimony obligation if I retire?  Or from the other side:  What happens if my ex retires and my alimony is reduced or terminated?  Divorce adds an extra layer of stress and questions to the whole retirement issue.

If you are paying alimony you can retire and have your alimony obligation reduced or terminated.  However, you might not be able to retire as early as you want to.  “Alimony may be modified or terminated upon the prospective or actual retirement of the obligor.”  N.J.S.A.22A:34-23(j) There is a rebuttable presumption that alimony shall terminate at the time the obligor spouse reaches full retirement age.  Currently, in order to be eligible for full social security benefits you have to be 66 years and 2 months for people born in 1955, with it gradually rising to 67 for those born in 1960 or later. So, if you are 65 and you want your alimony to terminate it will not happen automatically.

Even if you are 66 your alimony may not terminate because the presumption that it shall is rebuttable. That means that the receiving spouse can argue against termination based upon the facts of the case.  The factors the court considers in that instance are:

(a) The ages of the parties at the time of the application for retirement;

(b) 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;

(c) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;

(d) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;

(e) The duration or amount of alimony already paid;

(f) The health of the parties at the time of the retirement application;

(g) Assets of the parties at the time of the retirement application;

(h) Whether the recipient has reached full retirement age as defined in this section;

(i) Sources of income, both earned and unearned, of the parties;

(j) The ability of the recipient to have saved adequately for retirement; and

(k) Any other factors that the court may deem relevant. N.J.S.A.22A:34-23(j)(a-k)

After the court reviews the factors it may decide the presumption that the obligor spouse can retire has been overcome. At that point it will apply the alimony factors discussed in Week 1 of our Alimony 101 Series.  The court will then determine whether modification or termination of alimony is appropriate.

The court will also address changes or termination of alimony in cases where the obligor spouse has not yet retired; or is seeking to retire prior to obtaining full retirement age. This is typically a more challenging request.  However, there are circumstances that might make such a request completely reasonable and acheivable.

As with almost every aspect of alimony (and family law in general) all of the court’s analysis is fact specific. In connection with a request for a reduction or termination of alimony the moving party must file a current Case Information Statement as well as the Case Information Statement that was filed at the time of the entry of the original alimony award.  Once again the court reviews numerous factors to determine if the application is made in good faith.

If you wish to retire and are currently paying alimony consultation with a family law attorney is a smart move. The application which would need to be filed with the court is very detailed and fact specific.  Some of the facts that need to be referenced were your circumstances at the time of the divorce which could be 5, 10, 15 or more years ago.  If you have any questions regarding retirement and alimony and how it relates to your case we are available to discuss your concerns with you, please call our firm at 908-879-9499.

New Love. Old Alimony.

            As we discussed last week alimony is subject to modification based upon changed circumstances.  Often the changed circumstance is a new relationship.  Do new relationships affect alimony?  As with so many issues in family law the answer is:  Maybe.

The supporting spouse entering into a new relationship does not affect alimony. The dependent spouse entering into a new relationship might – depending upon the seriousness of the relationship.  A dating relationship or even an engagement should not affect alimony.  However, co-habitation would.

“Alimony may be suspended or terminated if the payee cohabits with another person. Cohabitation involves a mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.”   N.J.S.A.2A:34-23(n)

The Court when determining whether or not cohabitation is occurring considered several factors:
(1)Intertwined finances such as joint bank accounts and other joint holdings or liabilities;

(2)Sharing or joint responsibility for living expenses;

(3)Recognition of the relationship in the couple’s social and family circle;

(4)Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive intimate personal relationship;

(5)Sharing household chores;

(6)Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of subsection h. of R.S.25:1-5; and

(7)All other relevant evidence.  N.J.S.A.2A:34-23(n)(1-7)

Another factor the Court may consider is the length of the relationship. The Court can find cohabitation even if the new couple do not live together on a full-time basis.

If you have any questions regarding alimony and how it relates to your case we are available to discuss your concerns with you, please call our firm at 908-879-9499.

WEEK 4

Now What? Job Loss and Alimony

            Alimony is based upon the circumstances at the time of the divorce.  With respect to the amount of alimony a significant factor is the supporting spouse’s income and the dependent spouse’s income or imputed income.  However, as we know life brings changes.  Unfortunately, a common change people face is a loss of a job.  This raises difficult questions:  What happens if the supporting spouse loses their job?  Are they still required to pay the same amount of alimony?

The answer to the second question is yes – temporarily at least. If the supporting spouse works for someone else and is terminated they can make an application to the Court for a reduction or termination of alimony based upon the loss of employment.  However, they can only make that application after 90 days.  During those 90 days the supporting spouse is expected to make all support payments.  The Court when it finally hears the application for reduction or termination of alimony based upon the job loss has the discretion to make the relief granted retroactive to the date of employment.  This means that the supporting spouse may be entitled to a refund of alimony payments or a credit on future payments if they continued to pay the full amount of alimony while unemployed.

There are several factors that the Court addresses when reviewing a reduction of alimony based upon loss of employment. Perhaps, the most significant factor is that the loss of employment is involuntary.  A supporting spouse cannot just quit their job because they are upset either with their job or with paying alimony and then request a reduction or termination.  The supporting spouse cannot avoid their alimony obligation by choosing to be un-employed or underemployed.  However, the Court will absolutely address an involuntary termination or reduction in income after the above-mentioned 90 day period.  The factors the Court reviews are contained in N.J.S.A.2A:34-23(k)(1-10):

(1) The reasons for any loss of income;

(2) Under circumstances where there has been a loss of employment, the obligor’s documented efforts to obtain replacement employment or to pursue an alternative occupation;

(3) Under circumstances where there has been a loss of employment, whether the obligor is making a good faith effort to find remunerative employment at any level and in any field;

(4) The income of the obligee; the obligee’s circumstances; and the obligee’s reasonable efforts to obtain employment in view of those circumstances and existing opportunities;

(5) The impact of the parties’ health on their ability to obtain employment;

(6) Any severance compensation or award made in connection with any loss of employment;

(7) Any changes in the respective financial circumstances of the parties that have occurred since the date of the order from which modification is sought;

(8) The reasons for any change in either party’s financial circumstances since the date of the order from which modification is sought, including, but not limited to, assessment of the extent to which either party’s financial circumstances at the time of the application are attributable to enhanced earnings or financial benefits received from any source since the date of the order;

(9) Whether a temporary remedy should be fashioned to provide adjustment of the support award from which modification is sought, and the terms of any such adjustment, pending continuing employment investigations by the unemployed spouse or partner;

and (10) Any other factor the court deems relevant to fairly and equitably decide the application.

As can be seen from the above-factors the Court not only reviews the change of circumstances of the supporting spouse, but of the dependent spouse as well. Courts frequently review alimony awards based upon all sorts of changed circumstances, not just loss of employment.  As we will address in the coming weeks new relationships and reaching retirement age are often considered changed circumstances that can affect alimony.

If you have any questions regarding alimony and how it relates to your case we are available to discuss your concerns with you, please call our firm at 908-879-9499.