Archives: alimony factors

As noted yesterday, the long awaited decision in the Gnall case was released today.  Previously, we have blogged about the Gnall v. Gnall case.  In this case, the Appellate Division deemed a 15 year marriage to be “long term” and remanded the matter for consideration of permanent alimony.  This case exploded onto the scene because it seemed to create a bright line that 15 years of marriage merited permanent alimony.

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However,  this case was decided before the new alimony reform statute had passed.  As I noted on this blog previously, there was a thought that the amendments to the alimony statute might render this much ado about nothing.  At the end of the day, it was much ado about nothing, but not because of the new statute, which was given very short shrift in the opinion.

Rather, the Justices, in a unanimous opinion, reiterated that all of the factors in the alimony statute must be considered, and no one factor can be elevated in importance.  One might say, “tell us something we don’t know.”

What was fascinating is the Supreme Court seemed to take both the trial court and the Appellate Division to task for focusing on one factor – duration of the marriage – to the exclusion of the others.  The Supreme Court noted:

… We find that the trial court did not consider and weigh all of the necessary factors required by N.J.S.A. 2A:34-23 in determining that permanent alimony was unwarranted but, instead, based its decision solely on N.J.S.A. 2A:34-23(b)(2). We further conclude that in reversing the Appellate Division inadvertently created a bright-line rule requiring an award of permanent alimony.

The Court went on to note that:

While the trial court identified the marriage as “not short-term,” it ultimately concluded that consideration of an award of permanent alimony was obviated by the parties’ relatively young ages and the fact that they were not married for twenty-five or thirty-years. The trial court therefore, in effect, determined that permanent alimony awards are reserved solely for long-term marriages of twenty-five years or more, excluding consideration of the other factors. No per se rule exists indicating that permanent alimony is unwarranted unless the twenty-fifth year anniversary has been reached. Therefore, we find that the trial court improperly weighed duration over the other statutorily defined factors in determining a long-term marriage must be twenty-five years or more.

We further conclude that in its disposition of this appeal the Appellate Division inadvertently created a bright-line rule for distinguishing between a short-term and long-term marriage as it pertains to an award of permanent alimony. Although the Appellate Division stated “we do not intend to draw specific lines delineating ‘short-term’ and ‘long-term’ marriages in an effort to define those cases warranting only limited duration rather than permanent alimony,” a fair reading of the opinion may lead to such a conclusion. By not clarifying that the statement reflected only the fifteen-year marriage in this particular case, the Appellate Division made a generally applicable declaration.

The Court further noted that in using the language that was used by the Appellate Division, consideration of the other alimony factors was functionally eliminated.  The Court held:

Moreover, we note that the final clause of the sentence affirms that the “not short-term” nature of a fifteen-year marriage mandates that it cannot be considered for limited duration alimony. Such a holding removes the other twelve factors from consideration for alimony awards once a marriage reaches the fifteen-year mark. Our cases have consistently held that all thirteen factors must be considered and given due weight, and the duration of marriage is only one factor to be considered. (Emphasis added).

There you have it – courts have to consider all of the factors.  Put another way, there can be long term marriages where permanent alimony was not appropriate when all of the other factors were considered, and short term marriages that may have required permanent alimony, all other things considered.

As noted above, the new statute was barely mentioned.  Essentially, the new statute was dismissed in a footnote which said:

N.J.S.A. 2A:34-23(c) was amended on September 10, 2014 to specify that “[f]or any marriage or civil union less than 20 years in duration, the total duration of alimony shall not, except in exceptional circumstances, exceed the length of the marriage or civil union. . . .” The amendment is not applicable to this case.

Clearly, on the remand, that means that the court will have to decide alimony based upon the old statute.  Query, however, what this means to cases settled or decided before the Amendment which have to go back to court for some reasons.  I suppose that some may use the footnote to argue that the old law should apply if it helps their client’s case.

I was fortunate to be one of the authors of the amicus brief filed by the New Jersey Chapter of the American Academy of Matrimonial Lawyers (AAML).  Even though the end result was somewhat anticlimactic, being involved in the process was still rewarding.

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Eric SolotoffEric 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 is 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 esolotoff@foxrothschild.com.

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Since Governor Christie signed into law the New Jersey alimony reform bill in September 2014, many divorced or divorcing spouses have asked what it means for the duration of the alimony payment specific to his or her case.  Do you have reason for optimism?  Do you have reason for concern?  While the law is still as fresh as can be and largely untested, the questions have some answers….and raise some more questions.

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While I previously blogged about the general changes in the law, the answers to the duration-related questions are not as simple as they may seem at first glance.  In case you were wondering, this blog post is not going to focus on the new provisions addressing a termination or modification of alimony in the event of retirement, cohabitation or a down income, each of which could also modify an existing alimony duration.  I will devote future blog posts to those specific portions of the amended law.

First, does the new law apply to your case?  The law generally only impacts the duration of alimony for those cases that were ongoing at the time of the law’s enactment or future divorces.  So, if your divorce was finalized PRIOR to the amendment’s effective date in September, whether by agreement or by a final judgment entered by a family judge following trial, you may be out of luck unless your situation fits into another portion of the amended law including, but not limited to, retirement, a down income, or cohabitation.

Next, does the new law really mean that your alimony will last for the length of the marriage?  The new law provides that the duration of alimony cannot be for longer than the length of the marriage, except if the marriage lasted for 20 years or longer.  In that case, permanent alimony still exists (although now categorized as the less controversially named and more practically applied “open durational alimony”).  The short answer is, it depends.

There was no language to this effect in the prior version of the law, and in most situations (of course, depending on the circumstances) family law judges were not inclined to award alimony for a duration equal to that of the length of the marriage.  So…..now what?   The practical effect is that payee spouses are more likely to argue than before for a duration of alimony that lasts for the length of the marriage (or close to it).

What about these “exceptional circumstances” that could impact on the duration of alimony?  The new law provides that certain “exceptional circumstances” may result in a duration of alimony longer than the marriage (even if the marriage lasted for less than 20 years).  These circumstances include, but not limited to, the ages of the parties, any health issues, career sacrifices and support, and more.  While the language is somewhat simultaneously nuanced and expansive, from a practical standpoint the enumerated circumstances are largely similar and/or encompassed by the standard statutory alimony factors that a court will consider in awarding alimony.  If there is a particularly unique set of circumstances in your given case – for example, a chronic illness that heightens the need for a longer alimony duration – the court would have considered it before and it will do so now in rendering a duration determination.

How is my duration impacted by all of those payments that I made/received during the case?  Before the amendment, many payor spouses would argue that the length of time that payments have been made during the divorce should be considered when determining the duration of alimony.  On the flip side, the payee spouse would assert that payments made during the case should not count towards the post-divorce duration of alimony.

Now, the nature, amount and length of support payments made during the divorce are to be considered by a court in rendering an alimony award.  Payor spouses looking to move a matter along and disincentivize the payee spouse to delay a conclusion have cause to rejoice, although the ultimate impact of such payments remains within the discretion of the trial judge.

The Takeaway:  The new law is just getting its feet wet, and litigants, attorneys and trial judges are wading their way through the unchartered waters.  One of the major goals in amending the alimony law was to address the way in which the duration of an alimony award is decided, most specifically in eliminating the phrase “permanent” alimony and limiting those situations in which “open durational” alimony – permanent alimony’s friendlier next door neighbor – would apply.  The simple and unsatisfying answer for both parties is that payor spouses will not have to pay alimony for longer than the duration of the marriage except in cases of exceptional circumstances.  The simple answer will not always be the right answer, though, as litigants arguing for or against the existence of exceptional circumstances will likely become anything but exceptional.

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Robert A. EpsteinRobert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group. Robert practices throughout New Jersey and is based in the firm’s Roseland, New Jersey office.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

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(photo courtesy of freedigitalphotos.net)

We have done dozens of posts on this blog about alimony over the last 5 years.  Recent experiences have convinced me that it is time to get basics. Despite all of the cases that say that you can’t use a formula (the rule of thumb we have discussed previously on this blog), more and more, people are espousing a blind adherence to the rule of thumb.  In one recent case with income of a few hundred thousand, an adversary told me that it was the maximum amount of alimony that I can get, despite the fact that it came no where close to meeting my client’s already pared down budget.  In another case, where the income was a few million, one side was arguing that the rule of thumb was a minimum, as if there should be no consideration of any other factors.

Despite the calls for alimony reform and formulas, as we have said many times, courts deciding cases cannot use rules of thumb.  Even when they do, they can’t tell you that they did.  Rather, they have to review the alimony factors set forth in the statute – remember them?  Here, they are again, from N.J.S.A. 2A:34-23(b):

(1) The actual need and ability of the parties to pay;

(2) The duration of the marriage or civil union;

(3) The age, physical and emotional health of the parties;

(4) The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living;

(5) The earning capacities, educational levels, vocational skills, and employability of the parties;

(6) The length of absence from the job market of the party seeking maintenance;

(7) The parental responsibilities for the children;

(8) The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;

(9) The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;

(10) The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;

(11) The income available to either party through investment of any assets held by that party;

(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment; and

(13) Any other factors which the court may deem relevant.

Continue Reading Alimony – Back to Basics

Alimony is supposed to be decided based upon the statutory factors, right?  There really isn’t a formula to determine alimony, right?  Even if there is this formula that is used to get a ball park figure for a range of alimony, judge’s can’t use it, right?  So what happens when they do? 

We have blogged on the so called "rule of thumb" several times before.  In fact, we reported on one case last year that specifically said that a formula approach to determine alimony was impermissible.  On the other hand, we also blogged on another case last year where an expert in a legal malpractice case against a divorce lawyer based her opinion that the alimony was too low based upon this formula and the court found this a permissible opinion because the use of a formula was "widely accepted by the members of the matrimonial bar.

The use of the "formula" or "rule of thumb" was disfavored again this month in the case of Eick v. Eick, an unreported (non-precedential) decision from the Appellate Division.  Just as it did last year, the Appellate Division stopped short of saying that the trial judge actually used a formula.  However, the court held:

Plaintiff argues that the remand judge may have used an impermissible formula to determine the amount of alimony, rather than applying the factors required by N.J.S.A. 2A:34-23(b) to the facts shown by the evidence. He contends that the judge subtracted defendant’s annual income of $52,909 from his five-year average income of $94,6322 and then awarded defendant thirty-three percent of the resulting figure. This calculation appears to match the amount of alimony awarded by the judge in this case.

We decline to speculate whether the remand judge used such a formula. Nevertheless, as a general proposition, we agree with plaintiff that use of a percentage formula based only on the parties’ incomes is not authorized by law. Such a formula does not weigh and balance particular factors as listed in the statute and as might affect each individual case.

Just as in the case last year, the court was not precluded from coming to the number that the formula determined, but "… but require additional support in the record for its determination."  So with all of these cases, is the take away that you cannot use a formula, but if a court does, it should make factual findings supporting the amount ordered? 

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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 practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.
 

This being a family law blog, we talk about alimony a lot.  One reason is that, because there are no guidelines, only factors to consider, alimony is one of the more difficult issues to resolve.  How many years should it be for?  When is it permanent?  What does permanent really mean?  Is there a rule that you get one year of alimony for each year of the marriage or you get alimony for half of the length of the marriage?  Is there a rule of thumb (formula)?  In fact, we have recently blogged twice on that issue alone.  In one post, wenoted that the Appellate Division noted unequivocally that a court could not use a formula. In another, we noted that the "rule of thumb" can be used by an expert in a legal malpractice case regarding a divorce to determine if the attorney may have committed malpractice

An unreported (non-precedential) Appellate Division decision released on January 12, 2012 in the case of Newman v. Newman touched on a few of the above issues.  While not boring you with all of the details, the following are the relevant facts.  The marriage was just under 13 years in length and the husband was 51 and the wife 40 at the time of the divorce. There were two children of the marriage.  The Court imputed $122,300 to the husband and $45,000 to the wife for support purposes.  The husband’s actual income was approximately $88,000 but he was provided free housing as an in-kind benefit which accounted for the difference between his cash income and the amount used for support.  The court awarded $27,000 per year in alimony.

Fun facts of this case: (1) the court awarded 10 years of alimony in a marriage of just under 13 years – a result that the Appellate Division deemed "reasonable"; (2) though budgets and factors were analyzed, when you do the math, the alimony was just under 35% of the difference – curiously close to what the so called "rule of thumb" would result in; (3) the court actually quantified an in-kind benefit – this is hardly done often enough though the Child Support Guidelines would seem to require it; (4) the trial judge deemed this 12 1/2 marriage to be "fairly long term"; (5) the husband’s counsel fees alone were more than $100,000 yet he appealed a $5,000 award to the wife’s attorneys.

Clearly, alimony cases are fact sensitive and, if tried, the result could vary from judge to judge.

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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 practices in Fox Rothschild’s Roseland, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

 

In August 2011, I posted an article on this blog entitled "Appellate Court Rejects ‘Rule of Thumb’ Formula to Calculate Alimony – Sort Of."  In that article, I noted that there was a dirty little secret used by judges and lawyers in New Jersey to come up with a "ball park" as to what alimony should be. This "rule of thumb" does not take into account all of the statutory factors. Rather, the formula simply subtracts the lower income (real or imputed) from the and multiplies the difference by a percentage. I have been told that that percentage is 30% or one-third in the northern part of the state and 25% in the southern part.

More importantly, I noted that judges really cannot use this formula and must make findings considering the law and all of the statutory factors.  This post was as a result of a case where the judge seemingly used the formula to determine alimony.  The Appellate Division remanded the matter to the trial court to determine alimony using the alimony factors.

So much to my surprise, a new case came out yesterday emanating from a legal malpractice case filed by a litigant against her divorce attorney.  Lo and behold, the Appellate Division notes that using this "rule of thumb is an appropriate way to calculate alimony. 

Continue Reading Appellate Court Approves the Use of "Rule of Thumb" Formula to Calculate Alimony – Sort Of

Right before the Thanksgiving holiday the NJ Appellate Court came out with an unpublished decision yet again reminding trial courts when permanent alimony should be permanent and not something else.  While there is no bright line, black and white rule written about the magic number of years that would entitle a spouse to permanent alimony, there are certainly some general facts that assist attorneys and judges alike in determining when a case is appropriate for permanent alimony.  This decision reminds us of those.

In the matter of Happold v. Happold, A-2792-10T1, decided November 21, 2011, the Appellate Court reversed and remanded (to a new judge in the trial court) a decision, which awarded the Wife 10 years of limited duration alimony instead of permanent alimony.  The relevant facts are as follows:

1. The parties were married for 21 years at the time the Complaint for Divorce was filed.

2. The parties were ages 42 and 43 at the time of the Complaint.

3. Three children were born of the marriage, one was emancipated before the trial.

4. The Wife became pregnant with the parties’ first child at the age of 16, when she was in the 10th grade.  Husband was in 11th grade at the time.  Wife dropped out of high school only completing a 9th grade level of education.  Husband continued in school and graduated.

5. One year after their first child’s birth, Wife moved into Husband’s parents’ home with Husband.  Wife never worked outside the home during this time.  Husband completed high school and began working.

6. The parties’ two other children were born in 1993 and 1995.  While Husband worked outside the home and his career continually advanced, Wife remained at home as the sole caretaker for the children and the home.

7. During the marriage, Husband controlled the parties’ finances except for a jointly held savings account intended to give Wife immediate access to money if Husband died.

8. At the time of the trial and during the last year of the marriage, Husband’s income was $238,500 and $215,000 respectively.

Continue Reading In a Long Term Marriage, Length of Marriage May Trump Age in the Alimony Calculus

Does it matter if a party’s income increases between the cut off date (usually the date of Complaint) and the time of the divorce?  What about the argument that this income does not reflect the marital lifestyle so it should be ignored?  These questions were answered by Ocean County Family Part Judge Lawrence Jones, who, in his brief time on the bench, has become a prolific writer contributing a number of reported decisions.

Judge Jones addressed these issues in the reported case of Dudas v. Dudas released on November 1, 2011.  While trial court opinions do not have to be followed by other trial courts or the Appellate Division, Judge Jones’ analysis of the issue was interesting.

In this case, the wife was primarily a stay at home parent.  During the marriage, the husband’s income grew to the mid-$40,000 range, with a one year high of $59,000 by the end of the marriage.  After the Complaint, the husband’s "… W-2 income … sharply jumped to a personal high of $64,000 in 2009, and then ballooned again to $76,000 in 2010. In 2011, defendant is on pace to earn $68,000." 

Not surprisingly, the wife sought alimony based upon this higher income.  The husband argued, "… that his post-complaint earnings are irrelevant because, (a) alimony should be based upon the parties’ marital standard of living, and (b) that standard of living was never based on the heightened level of earnings he presently enjoys."    Judge Jones disagreed with the husband.

Continue Reading The Impact of a Post Complaint Substantial Increase in Earnings – Marital Momentum or Much Ado About Nothing?

On July 3, 2011, there was on op-ed in the New York Times by Alexandra Harwin entitled Ending the Alimony Guessing Game.

In the piece, she posits that

The unpredictability of alimony rules imposes several costs. Negotiating a settlement deal is much harder when spouses have no idea what they’ll end up with if they take their chances in court. Litigation drags on and the bills pile up when lawyers and experts have to prove their clients deserve any alimony at all. All the while, the emotional costs mount as people awaiting divorce continue in unhappy marriages; some stay married indefinitely because they don’t know if divorce will leave them with enough money to make it on their own. That’s particularly troubling in cases of domestic violence: some wives endure years of abuse because they can’t be sure husbands who control the family finances will be required to give them the money they need to live if they leave. New York’s law minimizes these costs by establishing a mathematical formula to calculate temporary alimony, which one spouse pays the other while the divorce is pending; it also allows judges to adjust those awards up or down under special circumstances.

She also believes that guidelines would make the judges jobs easier and the divorce process fairer.

At first blush, this makes sense – but does it really?  Since all alimony guidelines are income based (and as she points out, they are only for temporary support), they ignore parties’ individual circumstances that are not income related.  In a way, guidelines presume that all peoples expenses are the same, that all people with similar income pay the same amount of taxes, that there are no special circumstances, that some families may be savers while others spend every penny earned (and then some), etc.

In NJ, to the extent possible, the goal of temporary support is to maintain the status quo. Sometimes it seems like or certainly could feel to the support payer to being unfair, especially where the other spouse is not working and the payor is paying for most direct expenses plus some amount for personal expenses on top of that.  The risk with guidelines, however, is that certain bills could never get paid if the personal responsible is not given enough money to pay and the other party is not required to make direct payments. 

On the other hand, does New Jersey have de facto guidelines anyway?  More and more, you hear about the "rule of thumb" – i.e. a mathematical formula where the lower income (or what that person could earn if not employed or working to their capacity) is subtracted from the payor’s income and alimony is fixed at one-third of the difference.  You see lawyers use this all of the time.  You see judges do this, even when they know that they cant, in trying to settle cases or even in decisions after a trial.  They don’t say that they are doing it but you can do the math and see that they are. The rule of thumb may be helpful to get a starting point for review, but if it is the absolute end point, ignoring all other factors, that could be a problem.

 

Continue Reading A Case Made For Alimony Guidelines – Not in NJ but do we want them?

Earlier today, I blogged about a NY Times article published yesterday about proposed New York legislation to adopt no fault divorce. That articles also noted that there was legislation proposed to set up a standard formula that judges would need to use to determine alimony (known in New York as maintenance).  The article noted that judges would still have discretion to modify those awards, but that the genesis of the proposed legislation is to prevent "widely inconsistent awards." 

While New Jersey child support guidelines to use where the parties’ combined, net after tax income is $187,200 or less, we haves no such guidelines regarding alimony.  Further, I have heard of no proposal to implement them.  There is however, a dirty little secret called a "rule of thumb" that is often used to get a ballpark of what alimony should/could be.   Simply put, you subtract the lower income (or what that person could earn) from the higher income and take one-third of the difference. 

The rule of thumb is very simplistic and does not take into account any special factors other than income or earning capacity. It does not take into account actual taxes paid, lifestyle, sacrifices made, equitable distribution received or any of the other statutory factors.  Moreover, judges cannot use this to calculate alimony if the issue is tried before a judge. 

Do we want something like this in New Jersey?  While it may certainly make things easy and prevent wide deviations you may get from courtroom to courtroom and/or county to county, one size rarely fits all.  Rather, the statutory factors, if fully presented to the Court, and adequately considered Adan implemented by the judge, should result in a fair and reasonable award.  The rule of thumb is a useful sanity check, but no formula will be able to capture all scenarios.