A few weeks ago, I authored a post on this blog entitled Debunking the Myth That the Percentage Used in the So-Called “Alimony Rule of Thumb” Should Go Down as the Payer’s Income Goes Up. That post reiterated that the Court’s cannot use formulas, but that they are often used and that people have
Every family uses its money in different ways. Some families spend every cent they have on everything imaginable, others save every last possible cent for the proverbial “rainy day”, and many families fall somewhere in between. Once a marriage comes to an end, however, will both spouses be able to continue spending or saving in…
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…
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.
We have previously blogged on the "rule of thumb", 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. Of course, judges really cannot use this formula and must make findings considering the law and all of the statutory factors which are:
(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 nonfinancial 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
(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.
While these factors are supposed to be consider and the "rule of thumb" is not, we hear judge’s recommending settlements using this rule of thumb all of the time.
While the Appellate Division’s in the case of Tannen v. Tannen (addressed in another blog by Larry Cutler), primarily ruled that income paid to the divorcing wife as the beneficiary of a discretionary trust (the “WTT”) cannot be considered an asset available to fund alimony, that discussion naturally begged the question which was addressed in the second part of the case; namely – what effect does the actual income disbursed from the trust have on a determination of the needs of the parties in setting the alimony and child support obligation of the supporting spouse?
It is well-settled in New Jersey that the “marital standard of living” serves as the touchstone for the initial alimony award in a divorce. The standard of living during the marriage is the way the couple actually lived, whether they resorted to borrowing and parental support, or if they limited themselves to their earned income. The Court examines the couple’s “lifestyle expenses” in order to determine how much support is required by the dependent spouse to maintain that lifestyle support.
In Tannen, the trail judge sought to apply his conclusions regarding the parties’ lifestyle expenses to the calculation of the amount of support required by the dependent spouse to maintain that lifestyle. The judge acknowledged that the lifestyle expenses included those incurred by the parties and their children, however did not give any analysis as to the costs associated with the wife’s actual needs post-divorce in light of the fact that income was paid to her at least monthly by the WTT. He also failed to consider at all the husband’s post-divorce needs. The Appellate Division took issue.
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…
On May 13, 2010, the Appellate Division issued yet another unreported decision in the matter of Walsh v. Walsh. This is yet another interesting decision in a matter that has been appealed several times. In one of the prior opinions, the trial court employed an 11 year average of the husband’s income for…
In an interesting unpublished Appellate Division decision dated May 23, 2008 in the matter of Pechinka v. Pechinka, A-6089-06T3, the court affirmed a trial court decision that denied an ex-husband’s motion to terminate his limited duration alimony.
At the time of the divorce in 2002, the wife was earning $46,000. The husband earned $116,000 per year. They stipulated that there marital lifestyle was $7,000 to $7,500 per month for a family of four "… in an average month on living expenses."
In 2006, the wife earned almost $91,000 and with her alimony, she had $6,100 per month in net after tax funds. This amounts to about 81% to 87% of the joint family net income/lifestyle before the divorce.