Yesterday, I blogged on the Gnall case for the proposition that it appears to say that a 15 year marriage automatically merits permanent alimony. There were other interesting issues in Gnall too. Particularly interesting was the discussion of marital lifestyle. This issue is often vexing, and while there is a lot of discussion regarding marital lifestyle, there is not a lot of agreement regarding how it calculated.
As noted in the prior post, the husband’s income had be rapidly increasing during the last several years of the marriage. Here, the wife argued that the lifstyle should be calculated based on the “… the dollar amount of expenses incurred immediately prior to filing for divorce.” The Appellate Division rejected this and affirmed the trial judge’s averaging the parties’ expenses over several years. The Appellate Division noted:
. The “standard of living enjoyed during the marriage” is a concept that certainly includes objective criteria, such as the actual amount spent for mortgages, real estate taxes, car payments, and food expenses. However, it also encompasses more subtle components such as the intervals between car purchases, whether there has been a preference for new or pre-owned vehicles, and the frequency of and nature of restaurants when dining out.
The court also gave some guidance regarding consideration of taxes, since we know that alimony is taxable to the recipient, and also reminded that we have to back out children’s expenses. The Court said:
The judge understood plaintiff’s CIS budget addressed the needs of plaintiff and the children, and did not include a reserve for income taxes or savings. We determine that once the children’s needs, satisfied by the basic and supplemental child support awards, are removed, the monthly sum awarded sufficiently includes estimated income taxes.
The Court noted that the trial court failed to address savings, noting “… a court may design an award sufficient to permit the supported spouse to bolster his or her savings to “protect . . . against the day when alimony payments may cease” due to the supporting spouse’s death or other change in circumstances.” In this case, the wife sought savings based upon the amount saved in the prior 4 years. It does not appear that the Appellate Division was endorsing saving at the same level, only that the savings component had to be considered.
This holding regarding lifestyle is interesting, but is it consistent with other alimony case law? In situations where income goes up precipitously during the last few years of the marriage, is the use of an “average” for lifestyle fair? We know that we would not likely use an average of the income for the last several years if it appeared that the income in the year of divorce is more indicative of future income (i.e. there is no fluctuation up and down, but rather, a steady increase, especially if the payor is not in a job where yearly fluctuation would be expected). Also, we also know about those “marital momentum” cases that allow us to look past the historical income if efforts during the marriage caused an increase in income that was anticipated during the marriage (the Guglielmo case for example.) In fact, it is difficult to square the holding in Gnall to the holding in Guglielmo on this aspect of the legal analysis.
It will be interesting to see if this case goes up to the Supreme Court and if so, if this is an issue.
There are other issues in Gnall that will be the subject of future blogs.
Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or firstname.lastname@example.org.