As we have previously noted on this blog, some of the biggest changes in the 2014 alimony reform amendments came in connection with the issue of retirement. In fact, the amendment to the alimony statute now has three different standards, one for early retirement, one for retirement at the attainment of full retirement age (i.e. age upon which you can receive full Social Security benefits – 67 for most people) for new matters and a third for retirement at full retirement age for matters that pre-dated the amendments to the statute.
Perhaps due to either inartful drafting and/or creative lawyering, or both, there were arguments made that the language in the statute “…There shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age, …” applied to all matters, no matter when the divorce occurred.
The Appellate Division decided this question in the negative in the reported (precedential) case of Landers v. Landers released on February 22, 2016. In that case, which involved a pre-statute divorce where the ex-husband had been paying alimony for 24 years, the husband sought to terminate his divorce based upon retirement. The trial judge misapplied the law, per the Appellate Division, and determined that the ex-wife had not overcome the presumption that alimony should terminate.
In reversing, Judge Lihotz held:
Notably, the rebuttable presumption included in subsection (j)(1), which places the burden on the obligee to demonstrate continuation of the alimony award once an obligor attains full retirement age, N.J.S.A. 2A:34-23(j)(1), is not repeated, but replaced by a different standard in subsection (j)(3). The latter provision follows the prior principles outlined in Lepis and its progeny, by mandating “the court shall consider the ability of the obligee to have saved adequately for retirement as well as the following factors in order to determine whether the obligor, by a preponderance of the evidence, has demonstrated that modification or termination of alimony is appropriate . . . .” N.J.S.A. 2A:34-23(j)(3) (emphasis added).
Just as the Crews case elevated marital lifestyle ostensibly to a “super factor” in the alimony calculus prior to the 2014 amendments, it appears that this decision could have the same effect on the “ability to save for retirement” aspect of the new statute. Specifically, the decision holds:
Importantly, subsection (j)(3) elevates the ability of the obligee to have saved adequately for retirement, listed only as a factor under N.J.S.A. 2A:34-23(j)(1)(j), setting it apart from other considerations and requiring its explicit analysis. N.J.S.A. 2A:34-23(j)(3). Also, factors identified in the two subsections are not identical, making the court’s focus different. For example, most apt to plaintiff’s arguments are subsections (j)(3)(f) and (g), mandating an examination of the obligor’s ability to maintain payments upon retirement, and “[t]he obligee’s level of financial independence.”
The problem with making the ability to save to be a “super factor” presumes that permanent alimony, the predecessor to open durational alimony was actually permanent and could never be modified based upon retirement. That simply was not the case for the last several decades and there was ample decisional law addressing retirement. Moreover, if alimony had a “savings component” allowing a recipient to save for a time when alimony may end, does that too not suggest that even permanent alimony can end other than death (and upon death, alimony is secured by life insurance in most instances.)
So, put another way, if permanent alimony was never really permanent, or at the very least, if retirement of the payor was a foreseeable event, can someone argue that they knew or should have known of this possibility and the failure to save should not be held against the payor? Remember, just because retirement was not specifically included in a divorce agreement, does not mean that it was not foreseeable since the law allowed for it – and by the way, it was very difficult, pre-amendment to ever get anyone to agree that alimony should terminate on retirement so the issue was often silent and left to the law to address at the appropriate time.
Either way, as the nuances of the new alimony law work their way through the court, it will be interesting to see if the results lead to the call for even more reform.
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 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 firstname.lastname@example.org.
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