Articles Posted in Alimony/Spousal Support

file2651300054070-morguefile-deegolden-300x201Do I have to pay income tax on my spousal support payments?

In New Jersey and elsewhere, alimony is the transfer of money to a former or soon to be former spouse for his or her support and maintenance. This transfer typically results in a reduction in the taxable income for the payer and an increase for the payee. For alimony to be deducted from a paying spouse’s gross income, eight factors must be met. First, all spousal support payments must be made pursuant to a written decree that cannot state the payments do not qualify as alimony for tax purposes. In addition, the divorcing or former spouses may not reside together at the time the payments are made or file a joint income tax return. All alimony payments must be made to, or on behalf of, a former spouse in cash or using a cash equivalent and may not be referred to or deemed child support by a court. Finally, the spousal support obligation may not survive the payee’s death.

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piggy-bank-on-money morguefile financeWill my spouse be entitled to permanent alimony if we divorce after 15 years of marriage?

Since September 2014, the term “permanent alimony” became a thing of the past.  Now, in New Jersey, it has been  replaced with the phrase “open durational alimony.”  Currently, a family court must first determine whether open durational alimony is merited before considering other types of spousal support, such as limited duration or rehabilitative alimony. Although there is no bright-line rule regarding what constitutes a long-term marriage, the September 2014 amendments to New Jersey law now state a spousal support award may not exceed the length of a couple’s marriage if the union lasted less than 20 years, except in certain exceptional cases.

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Money fanI lost my job. Can I stop paying alimony to my ex?

Since September 10, 2014, New Jersey residents whose marriage lasted less than 20 years typically may not be required to pay alimony for a period that is longer than the length of the marriage, absent specifically enumerated special circumstances. The Alimony Reform Act of 2014 created this durational cap for marriages that ended after the law was signed by the governor. For couples whose final judgment of divorce was granted prior to this time, there must be a legitimate reason, such as a job loss by the payer, a significant increase in the income and/or  wealth of the payee, disability,  or cohabitation by the recipient, for a New Jersey court to alter a spousal support award. Most importantly, a New Jersey court may not revise an alimony order if a former couple’s judgment of divorce specifically addressed alimony adjustments in advance.

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1323680_question_mark sxchu username 7rainsI am about to retire. Can I stop making alimony payments to my former spouse based on New Jersey’s 2014 alimony reform law?

Since the Alimony Reform Act of 2014 was signed into law last September, New Jersey residents whose marriage lasted fewer than 20 years generally may not be required to pay alimony for more years than the couple was married, absent certain special circumstances. This durational cap only applies to couples who received a final judgment of divorce after the reform law was signed by the governor. For couples who ended their marriage prior to this, there must be a legitimate reason, such as retirement, cohabitation, or loss of a job, before a New Jersey court will modify an alimony award. In addition, a court may not alter an alimony order if the couple’s divorce judgment addressed such issues in advance.

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1381722_wedding_rings sxchuIn our firm’s family law practice and when we serve as Early Settlement Panelists  to mediate divorce cases  for the Superior Court of New Jersey,  Family Part, Chancery Division,  perhaps the most common issue in the overwhelming majority of divorce cases involves the issue of ……. alimony!  When clients meet with us at the beginning of a case, invariably, the most burning questions they ask us are:

Will I have to pay alimony to my husband or wife, if I get divorced?

Am I entitled to receive alimony?   If so, what type of alimony?   How long will my alimony last?  The next inquiry is always,  and perhaps the most important one to the client is “HOW MUCH ALIMONY WILL I HAVE TO PAY? or, “HOW MUCH ALIMONY AM I ENTITLED TO RECEIVE?”

We are frequently asked, “What if I want to live with someone after I start or after I finish my divorce?  How will this impact the alimony? What if I am receiving alimony and my former spouse dies?

These are ALL good, important questions that we attempt to answer for our prospective clients, and guide and counsel them in their divorce action.

Unfortunately, if you are looking for a quick answer right now from reading this blog, you won’t find it.  This is because the answers to these questions are not arrived at by the mere consult of a formula, or a page in a book,  where you simply plug in some income data, some dates,  and  other information and  it spews out the amount, the  type, or the duration  of alimony that you will have to pay or you would be entitled to receive, as the case may be. Indeed, that IS the case, generally, as to how child support is calculated (i.e.- by use of the New Jersey Child Support Guidelines).  Not so when it comes to alimony!

Instead, the answer to these questions comes from years and years of experience in applying and advocating the factors found in the New Jersey Case Law and Statutes which set forth the criteria which allows, in fact, directs the judges and the family law attorneys to consider when making  a determination as to alimony.  Of course, ultimately, it is the judge’s determination that will govern if the parties, despite  assistance of their counsel, have not been able to settle their case without the necessity for the judge to conduct a trial after which the judge will enter the alimony award.  Fortunately, with experienced legal counsel, statistically, approximately  90-95% of all divorce cases that enter the system will, eventually, settle; that is, the parties and their counsel will be able to achieve an agreement with respect to the issues in their case, including alimony, without having to endure the emotionally and oftentimes, financially draining process of a trial.   And, if a trail is necessary because of the failure of your spouse to be reasonable, the attorneys at Goldstein Law Group LLP are experienced trial attorneys that zealously represents our client’s interest to pursue the objectives of our clients and a result that is important to our client.

In general, alimony is paid to an ex-spouse by his or her former spouse for a specified period of years,  or an unlimited duration, or until a certain contemplated event may occur which allows a dependent spouse to become fully or partially able to contribute to his or her own support (“rehabilitative alimony”). Such spousal support would typically be awarded to a financially dependent spouse in order to ensure that both former spouses continue to live a substantially similar quality of life (standard of living)  following the end of their marriage. In New Jersey, alimony will not normally be awarded when each member of the former couple has a comparable earning capacity.  Although it may feel that way, it is important to note that alimony is not designed to serve as a punishment or a reward for either member of the divorcing couple.  It is important for you to know, as a current divorce litigant or if you are contemplating moving forward with a divorce in the future, what the statute in New Jersey directs as the factors which a court must consider in determining the myriad facts in a specific case before a definitive answer can be given to the following burning questions that most divorce litigants want to know almost immediately when they consult with us about a divorce:

To have a better understanding yourself, a look at the fourteen(14) statutory factors which the court is obligated to consider in making a determination as to alimony, is indispensable.  We’ve made it easy for you.   Here they are:

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IMG_0950 morguefile dmedinaMany divorce litigants, after they endure an emotional, and many times costly divorce process, later suffer some economic change –  a hardship that did not exist when their divorce was finalized, and find that the support award you are paying, or the support you are receiving, is proving to be too much to bear (as the payer) or not enough to pay your bills and live (if you are the payee).  You might be wondering, under what circumstances will a New Jersey Court modify (increase or decrease),  or  even terminate my  alimony?

The answer to these questions is difficult to quantify.  To answer it, you need to be aware of the laws governing alimony (also known as “spousla support”,  or “maintenance”). New Jersey has various types of alimony that may be awarded to a dependent spouse at the time of a divorce.   In many cases, even before the divorce reaches a conclusion (we call this “pre-judgment”), an interim support order may be entered by the court while the case is pending.  This is to ensure that the economic status-quo that existed before hte divorce case commenced is maintained, to the extent the economics of the case permit this. Such an order for support or other relief that is entered during the pendency of the case is referred to as a “pendente lite” order.  It literally means “pending the litigation.”

Answering the above questions about how to modify or terminate an alimony order, or to defend against a motion from your ex-spouse seeking to modify or terminate the support you receive, while once well settled in the law, has recently been exposed to some uncertainty since the passage of the new legislation by Governor Chris Christie on September 10, 2014.  For example, under the new alimony statute reforms that were enacted into law in September 2014, the form of alimony once known as “permanent” alimony was dispensed with.  In its place, the legislature created  “open durational” alimony.    Please follow our blog or consult our website which is linked to this blog to learn more about the different types of alimony  that currently exist under New Jersey law.  In general, an alimony order may be subject to modification or termination after it is entered unless the former spouses specifically bargained for and agreed otherwise in their property settlement agreement.  This is commonly known as an “anti-lepis” provision.   Typically, a  spousal support award  may be reduced or, in some cases,  terminated based on the changed circumstances of either party or the nonoccurrence of a circumstance the court expected to occur when the award was issued.  Another type of alimony in New Jersey, known as a limited duration award (typically for a period of months or years) may be modified or even eliminated when or if a substantial change of circumstances may occur, even if that happens  before the court-specified term of alimony expires.

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file8451279077718 morguefile mensaticIn an Appellate Division case, a couple divorced in 2012 after 29 years of marriage. At the time, both spouses were in their late forties and their two children were grown and emancipated. Because the former spouses disagreed about the appropriate amount and duration of alimony, they chose to engage in binding arbitration over the issue.

During the course of the marriage, both spouses earned comparable incomes. Immediately prior to initiating divorce proceedings, however, the former wife lost her job. Because of this, she was enrolled in a technology institute and collecting about $525 in weekly unemployment compensation at the time of the arbitration hearing. At the hearing, the woman told the arbitrator she would complete her training in July 2013 and expected to be earning a larger salary than she previously received within two years.

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file0001849487704 morguefile username jppiIn New Jersey, an alimony or child support order may be modified based on permanently changed circumstances. When the facts are disputed by the former spouses, a court may choose to order a plenary, or evidentiary, hearing. In Galante v. Galante, a married couple with three children divorced in 2011. As part of the divorce proceedings, the couple entered into a Marital Settlement Agreement (“MSA”) that required the husband  to pay all of his youngest child’s expenses in lieu of traditional a child support payment based on the child support guidelines. It also included an alimony obligation from the husband to the wife that was broken down into two steps where he would pay certain expenses of the Wife plus he would give her a weekly amount of support direct.  After the former marital residence would be sold, the second step of the alimony kicked in.  In step two, the husband simply paid the wife a fixed sum of alimony each month.

About one year after the couple divorced, the husband sought to vacate the MSA due to “manifest unfairness.” Approximately six months after his request was denied, the man filed a new motion, this time he sought to modify his support and other obligations. As part of this new motion, he also requested a plenary hearing to address his requested relief and to determine how much his support should be reduced to.

In his motion, the former husband claimed that the parties’ MSA should be modified due to his changed financial circumstances. According to the former husband, since the time of the divorce being entered in 2011, his business income declined significantly, his business assets were seized by creditors, and he owed $16,000 in medical bills. The husband also stated that his financial circumstances were permanently changed when he accepted a much lower paying job with a new company. In response, the wife filed a cross-motion asking the trial court to deny her former husband’s request.

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file0001153014994 morguefile graceyIn New Jersey, an individual who seeks to modify his or her alimony obligation based on changed circumstances must establish that such changes are permanent. In an Appellate Division case, a couple divorced in 2007. At the time, the terms of the couple’s property settlement agreement (“PSA”) were incorporated into their dual judgment of divorce. As part of the PSA, the husband agreed to pay his former wife $2,500 per month in permanent alimony.

In January 2013, the man stopped working for his towing business due to health reasons. Despite this, he maintained a 51 percent share in the company.  A few months later, the former husband sought to reduce or terminate his alimony obligation. According to the man, his changed circumstances merited such a change.

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file000623237995 morguefile jetlovskiWhen an alimony recipient begins living with a new partner, he or she must demonstrate that a continuing financial need exists in order to continue receiving spousal support. In an unpublished opinion, a couple divorced after about 14 years of marriage. Their June 2005 judgment of divorce incorporated a matrimonial settlement agreement (“MSA”) that required the husband to pay his former wife limited-duration (a/k/a “term”) alimony until August 2013. The MSA also stated the alimony award would be subject to modification or termination if the former wife began cohabiting with a new partner.

In 2012, the former husband filed a motion to terminate alimony payments after learning his former wife’s boyfriend began residing with her. The family court denied the man’s motion because he failed to establish that his former wife received a financial benefit from her new living arrangement. A few months later, the former wife moved into a home that was owned by her boyfriend. In April 2013, the former husband filed another motion to terminate his alimony obligations as of the date their cohabitation began or the date of his motion.

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