FAQs: Alimony in NJ Part II

How Does Retirement Affect Alimony in NJ?

The current law in New Jersey concerning alimony states that alimony payments will terminate once the paying spouse has reached full retirement age. This means the age when the paying spouse can finally receive full Social Security benefits. This is a rebuttable presumption, which may be overcome if the recipient spouse can demonstrate the existence of multiple factors.

What Factors Rebut the Presumption of Termination of Alimony in NJ Upon Reaching Retirement age?

The party must show that alimony should continue, and the court must look at the parties ages at the time they apply for retirement. The court will look to the age of the parties when they married, and the ages when the alimony was awarded, as well as the degree of dependency the recipient spouse had upon the paying spouse during the formal relationship. If the recipient spouse gave up something of value, like an asset, in exchange for the security of a longer or larger award of alimony, as well as the amount and length of time alimony has already been paid. Of course, the court must also consider the parties' health upon application of retirement, as well as their assets and whether the paying spouse has reached full retirement age. The court will also decide whether the paying spouse has had the ability to save sufficiently for retirement, and their income (both earned and unearned).

How is This new Statute Different From its Predecessor?

The law changed in September 2014 and therefore applies only to prospective agreements. Before the change, an ex-spouse who paid alimony but was facing retirement could only ask for a modification or termination based on a change in circumstances. The new law gives the court more direction if there is an application for modification based on retirement. It also gave the rebuttable presumption to the party upon retirement age, whereas before, the burden fell upon the spouse asking for a reduction to demonstrate a change.

What if one Party Wants to Retire Early in New Jersey?

If a party wants to retire early, and avoid further payments of alimony in NJ, they must demonstrate by a preponderance of the evidence that early retirement is reasonable and made in good faith. This means that they are not retiring early simply to avoid paying alimony. Notably, retiring early by itself is not necessarily sufficient to warrant a modification or reduction in alimony in NJ.

What Must a Party Show to Prove Their Early Retirement is in Good Faith and Reasonable?

These factors are very similar to the other factors the court examines for other alimony questions, such as the parties ages and health at the time of the application for early retirement. The question is very fact-specific. Courts must look at the industry the paying spouse is in, and what the common age of retirement is for that occupation and industry. If there are any mandatory retirement dates at the paying spouse's workplace, the court must take that into consideration. Additionally, the court can look at the reasons the paying spouse has provided for retirement, including pressure from his employer to retire, or incentives offered if he or she does so. Finally, the court has to decide whether the paying spouse will even be able to maintain the alimony payments after retirement, how financially independent they will be, and any other relevant factor the court might consider to be relevant.

What if a Party has not yet Retired, but Asks to Modify Alimony in NJ for Prospective Retirement?

Parties can ask the court to modify or terminate alimony in NJ even if they have not actually yet retired. The statute, amended in 2014, allows parties to modify or terminate alimony payments upon actual, early or prospective retirement. In Mueller v. Mueller, the New Jersey courts had to determine what 'prospective retirement' really means. In the case, the parties had been married for 20 years. They settled, and the husband agreed he would pay his wife $300 each week in what was then called permanent alimony. There were no provisions in the agreement which contemplated retirement of the parties. When he reached age 57, the husband filed a post-judgment motion, arguing that he intended to retire in five years when he became eligible for his full pension. He sought clarification under the statute. Prospective retirement motions allow the paying spouse to determine whether their alimony payments will change once they leave the workforce. This enables spouses to more adequately plan for their retirement.

How Early can a Spouse Apply for a Modification on Prospective Retirement?

In Mueller, although the statute does not have a specific time limit for 'prospective' retirement applications, the court determined the husband's request was premature. The Mueller judge argued that an application between 12 and 18 months of the contemplated retirement date was likely close enough to provide the court with sufficient details to determine the viability of the application. The courts require the spouse requesting a modification to provide 'reasonably current information' concerning their impending retirement. This time period would also allow the paying spouse enough time to start planning for their financial obligations after retirement.

What is Required to Successfully Obtain a Modification of Alimony in NJ for Prospective Retirement?

The Mueller court came up with a simple test to determine whether a modification or termination of alimony is warranted based upon prospective retirement. When the retirement will occur in the near future, rather than several years after the initial application, and the applicant presents a detailed plan for actual retirement, rather than a mere general desire to someday retire. Furthermore, the modification would be tied directly to the retirement date. There would not be any termination or modification until the actual date of retirement.

Changes to alimony in NJ upon retirement, or upon consideration of early or prospective retirement, can be complex and fact-intensive inquiries. Also, see Frequently Asked Questions: Alimony in NJ Part 1 and Frequently Asked Questions: Alimony in NJ Part 3. It is essential to have a qualified and experienced family lawyer on your side. If you have questions about how retirement might affect alimony awards in your case, contact Peter Van Aulen today at 201-845-7400 for a free, initial consultation.

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