New Jersey Info
New Jersey Divorce Start Your Divorce Find Professionals New Jersey Articles Divorce Facts Divorce Grounds Residency Divorce Laws Mediation/Counseling Divorce Process Legal Separation Annulments Property Division Alimony Child Custody Child Support Divorce Forms Process Service Grandparent Rights Forum New Jersey Products Divorce by County
New Jersey Articles
Agreements Attorney Relationship Custody & Visitation Child Support Collaborative Law Counseling Divorce/General Domestic Abuse Domestic Partnership Financial Planning Foreign Divorce Mediation Parenting Property Division Spousal Support
Retirement’s Effect on Alimony in New Jersey
What is retirement's effect on alimony obligations?
Retirement is a time in a person's life which many men look forward to. Unfortunately, if a divorced husband has a hefty alimony obligation, then this may throw a "monkey wrench" into his retirement plans. The issue of retirement often comes up frequently when alimony issues arise.
Many former husbands hate paying alimony with a passion. Many former husbands would rather live in a rooming house than continue to work and see a significant portion of their paycheck garnished and sent to their ex-wife. Many former husbands believe that retirement is their "way out" of the alimony trap. In New Jersey, if a person retires then this certainly can constitute a "change in circumstances" to justify the reduction or even the termination of alimony. The New Jersey courts analyze each alimony reduction application based on retirement on a case by case basis. The courts will review the parties case information statements, their medical records, the reasons for the retirement, and the ability of the parties to continue to work. Every case is different, and the court tries to "zero in" on the facts of each case. There is no magic case that says that alimony automatically ends once a person retires. Life is not that simple in the world of matrimonial practice.
In my experience, litigating an alimony reduction case is often as difficult and often more acrimonious than the original divorce case was. People hold grudges, and time does not always heal emotional wounds. An alimony reduction case is in many instances a "round two" or a rematch of the original divorce case. Many times former wives feel that they were cheated in the original divorce, and that this time around they will not be taken advantage of.
In summary, there are several keys to obtaining a successful outcome in any alimony reduction case. First, the applicant must be able to provide adequate documentation that proves that the retirement is made in good faith. The applicant must be able to provide "paper proof" that the retirement is not contrived, or designed solely to reduce his alimony obligation. The applicant must also submit excellent legal papers to the court. If the legal paperwork is sloppy and if it is not thoroughly prepared, then the court will in most instances not even grant you a Lepis hearing. Third, an applicant must be reasonable. In many alimony reduction cases based on retirement, the court will only reduce alimony and not eliminate it entirely. I always advise my clients to be reasonable. Most courts will pre-try an alimony reduction case, and then indicate to the parties how they view the merits of their case. The courts are flooded with Lepis cases, and their goal is to resolve them as fair and expeditiously as possible. The Family Courts always encourage the parties to reach an amicable settlement. The Family Court's ruling may be influenced if one party is not reasonable in the settlement negotiations. Therefore, be forewarned to always negotiate in good faith.
If a spouse retires does this constitute a "change of circumstances" to justify a termination of alimony?
If a husband/payor has a good faith retirement at the age of 65 then this event may constitute a "change of circumstances" to justify a modification of alimony. The court will also consider several other factors such as; the age of the parties; how the pensions and retirement assets were divided during the marriage; whether the retirement was reasonable; and was the retirement motivated to reduce alimony. Our New Jersey courts have held that when a person retires at the age of 65, he is entitled to a plenary hearing to reduce alimony based on a "change of circumstances."
If a payor spouse retires before the age of 65, then he is subjected to a more stringent standard to have alimony terminated. The court will then balance the benefits to the payor spouse against the disadvantage to the payee spouse. Only if the advantage to the retiring spouse substantially outweighs the disadvantage to the payee spouse will the court view the retirement as a legitimate change of circumstances which would justify a modification of alimony.
Some other factors that a court considers when it rules on a Lepis application to terminate alimony on the grounds of retirement are: the age and health of the party; his or her motives in retiring; his or her ability to pay support; and the ability of the other spouse to provide for herself.
I have just retired and my income has been cut in half. Can I now make an application to reduce my alimony obligations?
The retirement of the payor/husband may be sufficient grounds to constitute a change in circumstances to reduce or terminate alimony. However, it must be emphasized that retirement alone is not an automatic grounds to terminate alimony. The key issue is whether the payor/husband is retiring voluntarily or mandatorily, and whether his retirement is being taken at the ordinary retirement age, at an eligible early retirement age, or at some other time for some reason. Some basic questions, once answered, will shed some light on the voluntariness of the retirement. Each alimony case is determined on a case by case basis. Unfortunately, there is no quick and easy answer to legal questions that concern the interplay between retirement and retirement.
What is the key case that analyzes whether a husband's retirement constitutes a "change in circumstances?"
The key case that analyzes whether a husband's retirement constitutes a "change in circumstances" is Deegan v. Deegan, 254 N.J. Super. 350 (App. Div. 1992). In the Deegan case, the husband elected an early retirement, and he then sought to modify his alimony obligations based on a change of circumstances. Mr. Deegan was 60 years old and a man who did physical labor with the steamfitter's union. He stated that the physical labor required by his job was becoming more difficult because of his age. At the time of the divorce, his ex-wife was given part of the pension and so, under Innes and the statute, N.J.S.A. 2A:23(b), his pension was not a source of income for the purposes of alimony.
What caused Mr. Deegans's petition for a reduction was the fact that the union had offered him an attractive lump sum buy out option of his pension. This frequently happens in the industry as companies want to reduce staff and cut expenses. Mr. Deegan advised the court that he had taken the $189,000 lump sum pension payment and invested in tin an IRA where he got a return of $13,100 per year. Mrs. Deegan argued that her ex-husband did not retire in good faith, and that her alimony should not be reduced.
The court held that in determining whether to modify alimony based upon retirement as a changed circumstance under Lepis, the pivotal issue was whether the advantage to the retiring spouse substantially outweighed the disadvantage to the recipient spouse. The court concluded that only if the answer was in the affirmative should the retirement be viewed as a legitimate change of circumstances to justify a reduction of alimony.
The Deegan court did not reflexively hold that alimony should be reduced because the ex-husband's income was reduced by his retirement. Rather the court analyzed a variety of factors and circumstances to analyze the alimony reduction claim. The Deegan court held that it must look at the motive of the payor in retiring early, the timing of the retirement, and the payor's ability to make the alimony payment even after the retirement.
In any alimony reduction case based on a retirement, the court must assess whether the husband's retirement was made in good faith and otherwise reasonable. The court will also have to assess whether under all of the circumstances it was reasonable for the supporting spouse to retire. The court considers the age, health of the party, the motives in retiring, the timing of the retirement, his ability to pay maintenance even after retirement, and the ability of the other spouse to provide for herself.
What is the legal test that the court uses to assess whether an early retirement constitutes a "change of circumstances" to reduce alimony?
Another key case is Dilger v. Dilger, 242 N.J. 380 (Ch. Div. 1990). In the Dilger case, a former husband, who had a pre-existing alimony obligation to his former wife of 30 years, voluntarily retired at the age of 62 ¬Ω years. The husband sought to reduce his alimony based on this changed circumstance. The court found that the former spouse's voluntary retirement at the age of 62¬Ω was not made in good faith, and it was unreasonable under all of the circumstances presented. The court noted that a reasonable retirement age would, in most cases, be 65.
In denying his application the court considered the following criteria:
I have just turned 65 years of age, and I am retiring next month from my job at the plant. Once I retire can I stop paying alimony to my former wife?
In contrast with the more controversial early retirement cases, the courts have consistently held that a good faith retirement at the age of 65 may constitute a change in circumstances for purposes of reducing alimony. See, Silvan v. Silvan, 267 N.J. Super. 578 (App. Div. 1993). In virtually all cases wherein an applicant is over the age of 65 years of age, and if the former husband files an alimony reduction motion, at the very least he is given a Lepis hearing.
In this type of scenario, the court will schedule the case for a Lepis hearing. A person will usually receive a hearing in about three to four months after the Lepis application is filed. Depending on the complexities of the case, and the number of witnesses, the case will be heard over a course of several months. It is very rare for a court to devote an entire day for a Lepis case. Unfortunately, this factor increases the costs of litigation. Lawyers have to charge their clients if they have to wait in court for the case to be called.
New Jersey is an equitable distribution state, meaning that the division of property in a divorce is to be done fairly, not necessarily equally. The court can take into consideration any factor it deems relevant when dividing property, but it must consider certain factors, such as how long the couple was married and the age and health of both spouses, the income or property brought to the marriage by each spouse, the standard of living that was achieved during the marriage, and the extent to which one spouse may have deferred career goals, among others.
Easily Connect With a Lawyer or Mediator
Have Divorce Professionals from Your Area Contact You!
|Women's Rights Manual For Divorce
Cover Price: $
Your Price: $29.95
You Save: $26.00
"The Absolute Best Investment in Your Divorce"
|Men's Rights Manual For Divorce
Cover Price: $
Your Price: $29.95
You Save: $26.00
"Uncover Your Options and Unleash Solutions"
© 1996 - 2017 Divorce Source, Inc. All Rights Reserved.