I was reading an unreported Appellate Division case released today and gasped when I read the following sentence, " …Moreover, the permanent alimony figure was negotiated and presumably contemplated defendant’s retirement since he was fifty-three years old when he appeared before Judge Piscal on September 19, 2000." To read the full case, click here.
While the facts in this case may have justified the denial of the former husband’s motion to modify alimony, that statement struck a chord. In this case, the parties were married for 32 years, a long term marriage by any standards. However, by current standards, we often start talking about long term marriages being 15 years or more and if alimony is appropriate, the discussion is about permanent alimony begins. Moreover, although there is a well known Appellate Division case authored by Judge (now Supreme Court Justice) Long suggesting that it is better practice to negotiate the issue of retirement, the reality in practice is that it is rare that the party receiving alimony will concede the issue of retirement in the agreement. Often it is just too speculative. At best, you may get a recognition that there can be an application for a review upon retirement.
Given that you typically cannot get any concession about retirement and there is no doubt that this was a permanent alimony case, is the above quoted statement a fair or a realistic view? I don’t think so.
Assume a long term marriage where all assets, including retirement assets are equally divided. The law is clear that you cannot look to assets divided in equitable distribution for support. Post-divorce assets can be considered. If in the 8 or 10 or 12 years after the divorce, after paying alimony and perhaps child support, the payor does not accumulate substantial assets, then what. What if he bought a new house with his equitable distribution and did contribute the max to his 401k during the post divorce years. In this economy , the value of the home and the 401k could be down substantially.
More importantly, one would think by this sentence that someone who agrees to permanent alimony can never retire. This, however, is wrong as a matter of law. Thus, for a court to determine that a retirement by a person who was age 53 when he agreed to permanent alimony was contemplated in the agreement, is both practically unrealistic and legally incorrect in my opinion.
That said, as noted above, the denial of the motion to modify under the specific facts in that case made perfect sense.
However, I think it is essential, if possible, to at least get recognition in a Marital Settlement Agreement, that, if nothing else, the issue of retirement was discussed but unresolved to best preserve the issue for another day.