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Foreclosures and Job Loss are Making Alimony Difficult to Determine
How has the economy impacted the determination of alimony?
Recently alimony has been severely affected by the recession by the nation's high unemployment rates. Even though some New Jersey couples might be putting off their dream weddings until the economy improves, some unhappy couples are now delaying divorces for the same reason.
There has been a major drop in the amount of divorce filings all throughout New Jersey. There are many factors why the divorce rates are way down. First, average people simply can't afford to set up two separate households once they get divorced. Second, many unhappy couples are waiting for the real estate market to bounce back before they take the divorce plunge. Finally, many men are delaying filing for divorce because they are terrified of paying astronomical alimony payments. There are many shades of gray that are associated with determining the amount and the length of alimony. Determining alimony differs greatly from child support. A child support award is for the most part determined on set percentage guidelines. A judge has some discretion to nudge child support a little higher or lower based on the parties' circumstances. However, determining child support is similar to figuring out your income taxes. The main theme of paying your taxes and child support is "you owe what you owe." Meanwhile, the determination of alimony is a largely discretionary function. There are no alimony guidelines that are set on percentages of income. Instead alimony is based on approximately twenty factors that is left up to the individual judges to apply. The recession also has played a role in its uncertainty.
Because of the decrease in the value of homes and the increase in job loss, the lengths and amounts of any alimony award has become much less predictable. Most divorcing couples have two major assets and they are the equity in their house and/or their retirement plans. Unfortunately, both of these asset types have gotten "beat up" pretty bad in the recession.
Now many divorc'ees are banging down the doors of the court and are filing Lepis motions to lower or terminate their alimony payments. I always recommended to my clients that instead receiving a monthly alimony payment for a set amount of months or years that they should consider to take an alimony buyout. The dependent spouse could elect to take either a lump sum up front or a disproportionate share of the marital assets. In my view present-day dollars are certainly worth more than future-day dollars, or the illusory promise of them.
How can New Jersey cope with the current alimony crisis?
There should be some major changes to the alimony laws. Each alimony determination is now made on a case by case basis. Easier alimony guidelines could be created to include set percentages. Additionally, there is a major difference as to how child support and alimony are now determined. Child support is based on the parties net income. The determination of alimony should also be based on the parties' net income as well. Currently, the judges analyze the parties gross income when determining alimony. Unfortunately, the current system to determine alimony produces many unjust decisions. Moreover, these injustices create unfortunate hardships for tens of thousands of people who live in the Garden State.
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.
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