NJ Family Legal Blog : New Jersey Divorce and Family Lawyer & Attorney : Fox Rothschild Law Firm : Domestic Violence, Prenuptial Agreements, Child Custody

Many times clients ask me what happens with Social Security Benefits when a couple divorces. This is particularly relevant when one spouse (usually the wife) has spent a significant amount of time out of the workforce to raise children. Although many critics have doubts as to the long term viability of the Social Security System, at this time it serves as an important retirement benefit for many individuals. Moreover, this is often an issue which is taken into consideration when making a determination as to alimony.

The amount of benefit that a individual can collect is limited to one half of the former spouse’s benefit, unless the former spouse predeceases the individual in which case the entire benefit will be paid

An individual can collect only one benefit, so for situations when both spouses have been working, a calculation needs to made to determine which benefit will be greater. The Social Security Administration will calculate those benefits. Moreover, an individual does not have to wait for the former spouse to begin collecting benefits.  As long as the criteria are met, the former spouse can still be working.

An individual who is divorced must meet certain criteria in order to be permitted to collect benefits on his or her former spouse’s work record:

            * The individual must have been married for 10 years or longer.

            * The individual must not currently be married ( however, if there is a remarriage  and the second spouse is deceased, the individual may claim under either former spouse so long as each of the marriages lasted 10 years)

            * The individual must be 62 years or older (if the former spouse is deceased, the                            individual can begin collecting at age 60 and if the former spouse is  deceased, and the individual is disabled,  the individual can begin collecting at  age 50.

Oftentimes, there is a remarriage of the former spouse. In that case, and even if a second spouse is collecting benefits based upon the former spouse’s work history, there will be no reduction of benefits to the individual.

Finally, another important thing to remember is that in the event of a death of a former spouse (or a current spouse for that matter), any children under the age of 18, or 19 if they are a full time student are eligible for benefits as well.

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This was a good and bad week for Martin Brodeur, the goalie for the New Jersey Devils.  On a good note, he passed Patrick Roy as the all time winningest goalie in NHL history.  On a bad note, he lost his appeal of an alimony award in the Appellate Division.  To see the opinion, click here. This is the second appeal in this case.  To see the opinion in the first appeal, click here.

This was a 7 1/2 year marriage from the date of marriage until the date of separation.  It was clear that it is was the parties' intention that the wife would be a full time, stay at home caretaker of the children.

In the first appeal of this case, the Appellate Division affirmed the award of alimony to Melanie Brodeur in the amount of $500,000 per year but reversed the award of permanent alimony.  In this case, the Appellate Division affirmed the award of limited duration alimony until the youngest child graduated from high school.

In the first appeal, the Appellate Division held that:

limited duration alimony is particularly suitable for a situation such as here when the marriage was of short to intermediate duration and the woman is young and has young children. The judge is able to fashion an award that provides financial support to the former wife while she cares for the children.

The Court then addressed the factors that should  be considered in the decision of the length of the term, as follows:

The term should be informed not only by the age of the children, but also by the parties' decision that plaintiff should be the primary and full-time caretaker of the children.

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Mark Ashton, a partner in our Exton (Chester County), Pennsylvania office and the editor of our Pennsylvania Family Law Blog, wrote an interesting post entitled "The Bernard Madoff Investment Club.", on that blog.

To read the full post, click here.

There are several things to take from the post.  Know your assets and investment.  Don't just know them, understand them.  Next, save for retirement and make sure your spouse does too.  Next, make sure your investment advisor is insured and transparent.

I am certainly not doing justice to the depth and comprehensiveness of the post.  I urge you to click the link above and look at it yourself.

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Retiring from the workforce does not necessarily mean retiring from your child support obligations.  Rather, the circumstances of each case will dictate whether a person retiring in good faith can successfully obtain a child support modification.  

The Appellate Division recently addressed this issue in Kassin v. Kassin, affirming a trial court’s decision denying a defendant father’s motion to modify his child support obligation after he was terminated from his job at age 65 due to a heart-related condition. The parties were married for 25 years and 6 children were born of the marriage prior to the parties’ divorce in 1998. At the time of the divorce, the father was employed and earning approximately $23,000 annually. At the time of his motion for a support modification, 1 of the 6 children, age 15, was still unemancipated. In March 2007, at age 65, the father was terminated from his job. He claimed in his motion that the termination was caused by his inability to perform his job duties due to a heart-related medical condition and that he was unable to secure other employment for the same reasons. He also asserted that, as a result, his only income came in the form of social security benefits and charitable assistance from private agencies, thus providing him with an annual income of approximately $20,000. It was upon these facts that the father claimed the existence of changed circumstances justifying a modification pursuant to Lepis v. Lepis, 83 N.J. 139 (1980).

Citing to Silvan v. Sylvan, 267 N.J. Super. 578 (App. Div. 1993), the Appellate Division based its decision on the following non-exhaustive list of factors to consider when a party retires at age 65 and subsists on social security benefits: 

• the age gap between the parties;
• whether at the time of the initial alimony award any attention was given by the parties to the possibility of future retirement;
• whether the particular retirement was mandatory or voluntary;
• whether the particular retirement occurred earlier than might have been anticipated at the time alimony was awarded;
• the financial impact of that retirement upon the respective financial positions of the parties; and
• the motivation which led to the decision to retire, i.e., was it reasonable under all the circumstances or motivated primarily by a desire to reduce the alimony of a former spouse. 

In denying the father’s motion, the Court concluded that the father failed to submit evidence sufficiently linking his medical condition to his inability to work and of his search for other employment, as well as the fact that the income differential pre- and post-job termination was too insubstantial to constitute a changed circumstance. Notably, the Court reminded the father that, as a so-called "late in life" parent who, at age 65, still had an unemancipated child, he was responsible for working and saving for this child beyond an otherwise expected age.

Also of note was that, despite denying the father’s motion, the Court nevertheless remanded the case for a credit to be calculated on the father’s child support obligation pursuant to New Jersey’s Child Support Guidelines because the mother was receiving social security benefits for the unemancipated child.

This case highlights how simply wanting to retire early in good faith (rather than retiring to simply avoid a support obligation) is not as easy as it seems when the potential retiree has existing child support (similar issues arise in the context of alimony) obligations. 

EDITOR'S NOTE:  It seems unlikely as a matter of public policy that someone will ever be allowed to "retire" under any circumstances to avoid a child support obligation.  If there is a bona fide disability, that is another story however as that is usually beyond the obligor's control.  Absent disability, late in life parents will more likely than not be required to keep working and/or otherwise be required to pay support until all of their children are emancipated. - Eric S. Solotoff

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In the September 2008 ABA Journal, there was an article entitled 'Til Death Do Us Pay? As retired boomers head to the golf course, courts look at limits on alimony by Wendy N. Davis.  Discussed in that article is alimony after long marriages when the parties are nearing retirement age. This article got me thinking of a scenario we see in New Jersey frequently enough to make it worthy of discussion. 

Picture a 30+ year marriage where one party was the major breadwinner and the other did not work outside of the home (or if he or she did, there was a substantial disparity in incomes).  The knee jerk reaction is to say that this is a permanent alimony case, without question.

Now picture that there are substantial assets, including substantial retirement assets, that are going to be equally divided.  Does that change the assessment?  Maybe.

Now picture that each party is 62 years old.  Does that change the assessment? Maybe it should.
 

Presumably, the parties had discussed and considered retirement.  Even if they did not discuss it, retirement at 62 or 65 or 67 or some other reasonably anticipated age is not a far fetched concept.

In this case, one would expect that the alimony award entered could possibly equalize the parties' net incomes.  Even if it did not, the parties would likely be reasonably close in net income.  They will also have the same amount of assets.

Will the paying spouse be able to acquire substantially more assets in the few years before retirement? This is unlikely.  As the aforementioned article mentioned, will he be forced into "indentured servitude" to pay alimony so that the other spouse can be retired?  If so, is that fair?

The problem when negotiating settlements in these cases when representing the wage earner is that the other side will usually cling with a death grip on the notion of permanent alimony.  On top of that, in many cases, they will not even agree to language which gives the wage earner a right of review upon retirement - essentially leaving them to their devices to make a motion showing a change of circumstances (as opposed to skipping to step 2 which would be the financial analysis regarding whether the payor can still pay alimony based upon income and assets acquired post-divorce). 

This would seem contrary to the admonition that Judge (now Justice) Long included in a seminal case regarding retirement as it relates to alimony.  Specifically, she urged that it would be prudent to negotiate the retirement issue in a marital settlement agreement.  Despite that admonition, this is often easier said that done.

When it is not in the settlement agreement and the parties divorce at age 62, I can envision a defense to the retirement motion made just a few years later that "we agreed to permanent just a few years ago and retirement as foreseeable."  In short, the notion of permanent alimony will have been used as a shield and a sword. 

In any event, might it make more sense to agree to alimony for a term of years, with either a review at a certain age, unless the wage earner continues to earn as he/she has in the past and then it would continue until retirement.  While I know that few would agree to an automatic termination at retirement, shouldn't discovery and a financial review be automatic at this point.  While people always talk about wanting to avoid or narrow litigation - this would be a way to do it.  That said, it would be unusual to see someone giving up the advantage of the permanent alimony "right" without getting something back in return.  Under these facts, is that fair?

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