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?