After almost three years of legislative discussions, negotiations, arguments, and the like, alimony reform is coming to New Jersey in what is turning out to be light speed. Late last week, the New Jersey State Assembly unanimously passed a compromised form of long-debated legislation that would represent what many consider to be a substantial overhaul of New Jersey alimony law as we know it. Today, the Senate Judiciary Committee approved the bill, after which it was granted “emergency” status, and followed by a full Senate vote. The bill now rests on Governor Christie’s desk for his review. There are many changes in the present form of the bill from that earlier debated in the legislature, by the State Bar, various family law committees, and the like, as this issue has quickly come to a head. I provide below the major highlights of the law in its present form.
Regarding alimony awards, the law would only apply to awards involved in divorces that are in process, but not yet finalized, and future divorces that have yet to commence. While some alimony reformists were seeking a retroactive application of the law to provide alimony relief to those payor spouses whose divorces were already finalized (other than through circumstances such as retirement, cohabitation and involuntary job loss/income decline-type modification), the legal and practical implications of such a provision would have raised major questions that are beyond the content of this blog entry. For practitioners, this law will not only provide future guidance, but, critically, will provide for great use in ongoing divorce matters, especially where a question exists regarding whether alimony should be “permanent”, or what should happen to alimony once the payor reaches the age of retirement.
To that end, the alimony reform movement seemed to gain momentum following last year’s Appellate Division decision in Gnall v. Gnall, 432 N.J. Super. 129 (App. Div. 2013), which is now pending before the Supreme Court of New Jersey. One of the major issues in that case was the Appellate Court’s apparent holding that a 15-year marriage is one of long-term duration meriting a permanent alimony award. Under the new legislation, however, that would not be the case. As discussed below, the word “permanent,” in reference to alimony, will be removed from the statute, and a marriage of 15 years would no longer merit a “permanent” award.
Now for the highlights, some of which already exist as previously decided New Jersey case law, but of which are now being statutorily codified:
1. Standard of living – Neither party would have a greater entitlement to the standard of living (or a reasonably comparable standard of living) established during the marriage.
2. Pendente Lite support payments – The nature, amount and length of pendente lite support, if any, paid during a divorce proceeding is now a statutory factor to consider when rendering an alimony award. This bolsters the argument for those payors who pay interim support during a proceeding for months, if not years during a divorce proceeding.
3. Weight of alimony factors – In analyzing the alimony factors, the court is required to “consider and assess evidence with respect to all relevant” factors and specify, with written findings of fact and conclusions of law, if it determined that certain factors are more or less relevant than others. No factor shall carry more weight than any other factor unless the court finds otherwise.
4. Duration of alimony – For any marriage of less than 20 years in duration, the total duration of alimony shall not, “except in exceptional circumstances,” exceed the length of the marriage. The length and amount of alimony shall be determined pursuant to the statutory factors, as well as “the practical impact of the parties’ need for separate residences and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living established in the marriage . . .” A non-inclusive list of “exceptional circumstances” are set forth in the proposed law.
6. Reimbursement alimony – May not be modified for any reason.
7. Permanent alimony – The word “permanent” is changed to “open durational” alimony.
8. Retirement – The proposed law provides extensive language addressing a retirement scenario and, as a threshold matter, alimony may be modified or terminated upon the prospective or actual retirement of the obligor. While another post will merit a more in-depth discussion on this topic, the major changes include:
- “Full retirement age” is defined as the age at “which a person is eligible to receive full retirement benefits under the Social Security Act” – presently 67 years of age.
- There will be a rebuttable presumption that alimony terminates once the obligor spouse reaches full retirement age (which can be set to a different date based on a showing of “good cause”). The law then provides several factors for a court to consider in determining whether the rebuttable presumption can be overcome.
- If the rebuttable presumption is overcome based on the enunciated factors, the court is required to apply the standard alimony factors to determine whether a modification or termination of alimony is appropriate. Critically, “if the obligor intends to retire but has not yet retired, the court shall establish the conditions under which the modification or termination of alimony will be effective.”
- If the obligor seeks to retire before full retirement age, the obligor must prove by a preponderance of the evidence that the prospective or actual retirement is reasonable and made in good faith. A series of factors are then set forth to determine what constitutes “reasonable and made in good faith.”
- When a retirement application is filed in cases where there is an existing final alimony order or enforceable written agreement established prior to the effective date of the new law, the obligor’s reaching of full retirement age shall be deemed a good faith retirement.
9. Modification of alimony – The law separates self-employed obligors from non-self-employed obligors.
- As for non-self-employed obligors: a) a variety of factors are enunciated for a court’s consideration, most of which are already considered as part of the process when an application to modify alimony is made pursuant to Lepis v. Lepis, 81 N.J. 281 (1980); and b) importantly, the law provides that no application shall be filed until a party has been unemployed (involuntarily), or has not been able to return to or attain employment at prior income levels – or both – for a period of 90 days.
10. Cohabitation – Alimony may be suspended or terminated. The term is defined as involving a “mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.” A variety of factors are enunciated, similar to those detailed in existing case law. There cannot be an absence of cohabitation “solely on the grounds that the couple does not live together on a full-time basis.”
These are mainly the highlights of the pending law, and much discussion will follow once the law is enacted, interpreted, relied upon, and utilized in negotiations, arguments and the like. The changes to alimony duration, retirement and modification are undeniably significant to family law practice. Stay tuned to this blog for more updates and analysis on the new law as they unfold.