The impact of retirement on alimony obligations in New Jersey

A 2014 alimony reform law has made major changes.

New Jersey alimony law was amended in September 2014 after vigorous public and legislative debate over reform. One of the main issues was the impact of retirement on the ability to pay alimony. The new law establishes new court procedures and legal standards for retiring alimony payors, called obligors, who seek termination or modification of alimony orders.

Modification of New Jersey alimony at retirement before new law

Before the law changed, an ex-spouse with an ongoing alimony obligation facing retirement could ask the court for a modification or termination of the alimony based on changed circumstances. New Jersey court battles ensued over whether a retirement was in good faith and reasonable in light of the needs of the recipient spouse for continued support.

New standards for modification or termination of alimony at retirement

The new law provides specific direction to the court if an obligor requests modification or termination of an alimony order because he or she faces prospective or actual retirement. Different procedures are set out depending upon whether the original alimony order (usually part of the final order in the divorce proceeding) was entered after or before the effective date of the new law.

Standard for alimony orders entered after new law took effect

For original alimony orders entered after the new law, a rebuttable presumption exists that alimony terminates when the obligor reaches full retirement age as defined by federal Social Security law. This presumption can be overcome for good cause after the judge considers any factors relevant in the case, including these specific factors:

• The parties’ ages currently, when married and when the alimony was first awarded
• The financial dependency of the recipient during the marriage
• What the recipient gave up to get a more generous alimony award
• How long and how much alimony has been paid
• Health of the parties
• Assets of each
• Whether the recipient is at full retirement age
• Sources of income of each party
• Recipient’s ability to save for retirement

If the judge finds the presumption that alimony should stop has been overcome, to determine whether the original order should be modified or terminated, he or she is to weigh a list of 14 factors used to establish initial alimony awards in divorce proceedings.

When the obligor ex-spouse wants to retire before full retirement age and modify or terminate an alimony obligation, he or she has the burden to show that the retirement is reasonable and made in good faith, considering a specific list of factors. Some of them are: the generally accepted age of retirement in the obligor’s type of employment; each of the parties’ health and age; obligor’s reasons for wanting to retire; reasonable expectations of both parties about retirement; the obligor’s ability to pay; the recipient’s financial condition; and others.

Standard for alimony orders entered before new law took

For preamendment alimony awards, retiring at full retirement age is deemed to be in good faith. The court will decide whether the payor has shown that modification or termination is appropriate after considering the recipient’s ability “to have saved adequately for retirement,” anything relevant to their financial conditions and a specific list of factors similar to those considered in a postamendment case when the obligor has not reached retirement age.

Seek legal advice

Anyone facing alimony issues related to retirement, whether an obligor or recipient, should seek immediate guidance and representation by a lawyer, especially considering the complexity of the new law.

The attorneys of Lanza & Lanza in Flemington, New Jersey, represent clients in divorce throughout the state.