Alimony Reform in 2014: A Review

The list of amended statutory factors are as follows: 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, with neither party having a greater entitlement to that standard of living than the other; 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; 13) the nature, amount, and length of pendente lite support paid, if any; and 14) any other factors which the court may deem relevant. N.J.S.A. 2A:34-23(b).

Importantly, the newly codified additions to the enumerated factors include that a court must consider the nature, amount, and length of pendente lite support paid during a divorce proceeding when rendering a final alimony award. Id. at (b)(13). Therefore, with courts now required to consider how long temporary support was paid in determining a final alimony award, a spouse who is receiving monthly support payments on a temporary basis during a divorce proceeding, biding his or her time with the view that it will not impact the overall duration of a final alimony award, should now be deterred from doing so.

Although courts are to consider the standard of living established during the marriage, it is now clear that neither party has a greater right to the marital standard of living than the other. N.J.S.A. 2A:34-23(b) (4). A court reviewing an alimony request should “assess evidence with respect to all relevant statutory factors.” N.J.S.A. 2A:34-23(b), (c). The statute states that “[n]o factor shall be elevated in importance over any other factor unless the court finds otherwise.” Id. Further, the legislature requires judges to “make specific findings of fact and conclusions of law” as to the reasons that the court reached a conclusion that certain factors were more or less relevant than others when making an award. Id.

Section (b) further states that “[w]hen a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony.”

In addition to the factors listed in section (b) of the statute, courts are instructed to “also consider the practical impact of the parties' need for separate residences, and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living established in the marriage or civil union, to which both parties are entitled, with neither party having a greater entitlement thereto.” N.J.S.A. 2A:34-23(c). This is likely a resultant effect of the decision in Crews v. Crews, where the New Jersey Supreme Court held that a finding in respect to the marital standard of living was required and that “the standard was whether the supported spouse can maintain a lifestyle that is reasonably comparable to the standard of living enjoyed during the marriage.” Crews v. Crews, 164 N.J. 11, 17 (2000).

At the time, the New Jersey Supreme Court noted that “[i]f the supported spouse cannot, and if the supporting spouse's financial condition permits, a modification to the support award is appropriate and warranted.” Id. Consequently, this led courts to elevate the marital lifestyle above the other enumerated factors and it also led to the misconception that the supported spouse was the only one entitled to maintaining the marital standard of living. The amendment to the statute clarifies that neither party has a greater entitlement to the standard of living, nor a reasonably comparable standard of living, with that established during the marriage by taking into consideration that the parties will each have to support separate residences.

Determining Alimony Duration and Exceptional Circumstances

The amendment to section (c) of N.J.S.A. 2A:34-23 directs that an alimony award cannot exceed the length of a marriage when the duration of the marriage was less than 20 years, except in “exceptional circumstances.” A list of “exceptional circumstances” that may require an adjustment to the duration of alimony are now enumerated and include: 1) the ages of the parties at the time of the marriage or civil union and at the time of the alimony award; 2) the degree and duration of the dependency of one party on the other party during the marriage or civil union; 3) whether a spouse or partner has a chronic illness or unusual health circumstance; 4) whether a spouse or partner has given up a career or a career opportunity or otherwise supported the career of the other spouse or partner; 5) whether a spouse or partner has received a disproportionate share of the marital estate; 6) the impact of the marriage or civil union on either party's ability to become self-supporting, including but not limited to either party's responsibility as primary caretaker of a child; 7) tax considerations of either party; and 8) any other factors or circumstances that the court deems equitable, relevant and material. Id.

This change to the law may have gained momentum after Gnall v. Gnall was decided by the Appellate Division. 432 N.J. Super. 129 (App. Div. 2013), granting cert. 217 N.J. 52 (2014). In Gnall, there was a 15-year marriage that the appellate division considered long-term, warranting an award of permanent alimony, and a list of extenuating circumstances. Id. The Gnall case is currently pending before the Supreme Court of New Jersey, and the court's opinion will likely review the exceptional circumstances in Gnall using the newly minted statutory factors as a guide, giving these factors more depth for family law practitioners.

Prospective Application of The Statute

Importantly, the amended statute should not be construed either to modify the duration of alimony ordered, or agreed upon, or other specifically bargained for contractual provisions that have been incorporated into a final judgment of divorce or dissolution, a final order that has concluded post-judgment litigation, or any enforceable written agreement between the parties. N.J.S.A. 2A:34-23. Therefore, with regard to alimony awards, the law will apply only to divorces currently pending and future divorces. However, the amended statute will apply to applications to modify alimony obligations based upon the changes of circumstances and retirement of the obligor.

Actual or Prospective Retirement

While there is extensive case law on the subject of a retiring obligor's ability to modify or terminate his or her alimony obligation, the newly codified language of sections (j) (1) & (2) of N.J.S.A. 2A:34-23 provide an unmistakably discernable path for retiring obligor's applications, while decreasing their burden in obtaining relief.

A definitive good-faith age for retirement is added to the statute, which is determined by the currently required age of eligibility or “full retirement age” to receive full retirement benefits under section 216 of the Federal Social Security Act. 42 U.S.C. s.416. Full retirement age (also called “normal retirement age”) had been 65 for many years; however, beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959. Id.

The new statutory language provides that “[a]limony may be modified or terminated upon the prospective or actual retirement of the obligor,” and, that “there shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age ' ” N.J.S.A. 2A:34-23(j) (1).

However, the rebuttable presumption that alimony terminates once the obligor spouse reaches full retirement age can be overcome, and alimony duration can be set to a different date based on a showing of “good cause,” where a court makes “specific written findings of fact and conclusions of law.” N.J.S.A. 2A:34-23(j) (1). The statute proceeds to list the factors that the court must review in making that finding including: 1) The ages of the parties at the time of the application for retirement; 2) The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award; 3) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union; 4) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award; 5) The duration or amount of alimony already paid; 6) The health of the parties at the time of the retirement application; 7) Assets of the parties at the time of the retirement application; 8) Whether the recipient has reached full retirement age as defined in this section; 9) Sources of income, both earned and unearned, of the parties; 10) The ability of the recipient to have saved adequately for retirement; and 11) Any other factors that the court may deem relevant. Id.

If the court determines that upon good cause shown the presumption has been overcome, then “the court shall apply the alimony factors as set forth in subsection b. of the statute to the parties' current circumstances in order to determine whether modification or termination of alimony is appropriate.” Id. Any arrearages that have accrued prior to the termination date shall not be vacated or annulled based on a termination of alimony upon retirement. Id. Further, “[i]f the obligor intends to retire but has not yet retired the court shall establish the conditions under which the modification or termination of alimony will be effective.” N.J.S.A. 2A:34-23 (j) (1).

Under section (j) (2) of N.J.S.A. 2A:34-23, when an obligor seeks to retire prior to reaching full retirement age, the obligor has the burden of demonstrating by a preponderance of the evidence that the prospective or actual retirement is “reasonable” and “made in good faith.” In order to determine whether the obligor has met that burden, the court should consider the following factors: 1) The age and health of the parties at the time of the application; 2) The obligor's field of employment and the generally accepted age of retirement for those in that field; 3) The age when the obligor becomes eligible for retirement at the obligor's place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits; 4) The obligor's motives in retiring, including any pressures to retire applied by the obligor's employer or incentive plans offered by the obligor's employer; 5) The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution; 6) The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours; 7) The obligee's level of financial independence and the financial impact of the obligor's retirement upon the obligee; and 8) Any other relevant factors affecting the obligor's decision to retire and the parties' respective financial positions. N.J.S.A. 2A:34-23 (j) (2).

Section (j) (3) of N.J.S.A. 2A:34-23 deals with a retirement application where an existing final alimony order or enforceable written agreement was established prior to the effective date of the amendment. This section makes clear that there is no rebuttable presumption of termination upon the retirement of an obligor when such an agreement exists.

Now, when an application for termination or modification of alimony based on retirement is filed where an existing final alimony order or enforceable written agreement exists, the court must consider the “ability of the obligee to have saved adequately for retirement.” N.J.S.A. 2A:34-23(j) (3). And, the obligor must demonstrate by a preponderance of the evidence that modification or termination of alimony is appropriate based on the following factors; 1) The age and health of the parties at the time of the application; 2) The obligor's field of employment and the generally accepted age of retirement for those in that field; 3) The age when the obligor becomes eligible for retirement at the obligor's place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits; 4) The obligor's motives in retiring, including any pressures to retire applied by the obligor's employer or incentive plans offered by the obligor's employer; 5) The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution; 6) The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours; 7) The obligee's level of financial independence and the financial impact of the obligor's retirement upon the obligee; and 8) Any other relevant factors affecting the parties' respective financial positions. N.J.S.A. 2A:34-23(j) (3) (a)-(h).

The addition of N.J.S.A. 2A:34-23(j) (4) affirms that assets distributed between the parties at time of entry of a final order of divorce or dissolution of a civil union shall not be considered by a court when determining the parties' ability to pay alimony upon retirement.

Reduction of Income

Predating the amendment, the alimony statute stated that “[o]rders may be revised and altered by the court from time to time as circumstances may require.” N.J.S.A. 2A:34'23. Thus, alimony obligations, whether set in judicial orders or parties' agreements were “always subject to review and modification on a showing of 'changed circumstances.'” Lepis v. Lepis, 83 N.J. 139, 146 (1980). Lepis stated that “[w]hen the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself.” Id. at 157. In light of Lepis, courts are required to consider several factors to determine whether an alleged loss of income constitutes a “substantial and continuing” change in circumstance meriting further analysis and, ultimately, a potential alimony modification. Lepis, 83 N.J. 139, 146 (1980).

However, there was no conclusive period for what constituted “continuing,” defined in Lepis or subsequent case law. Under section (k) of the amended statute, now applications by non-self-employed parties may be filed when they have been unemployed, or have not been able to return to or attain employment at prior income levels, or both, for a period of 90 days. N.J.S.A. 2A:34-23(k). In addition, courts now have the discretion to make any relief granted retroactive to the date of the loss of employment or reduction of income for a non-self-employed party after the consideration of the enumerated factors. Id.

Non ' Self-Employed Obligors

When a W2, 1099, or other non-self-employed party seeks modification of alimony, the court shall consider the following factors: 1) The reasons for any loss of income; 2) Under circumstances where there has been a loss of employment, the obligor's documented efforts to obtain replacement employment or to pursue an alternative occupation; 3) Under circumstances where there has been a loss of employment, whether the obligor is making a good faith effort to find remunerative employment at any level and in any field; 4) The income of the obligee; the obligee's circumstances; and the obligee's reasonable efforts to obtain employment in view of those circumstances and existing opportunities; 5) The impact of the parties' health on their ability to obtain employment; 6) Any severance compensation or award made in connection with any loss of employment; 7) Any changes in the respective financial circumstances of the parties that have occurred since the date of the order from which modification is sought; 8) The reasons for any change in either party's financial circumstances since the date of the order from which modification is sought, including, but not limited to, assessment of the extent to which either party's financial circumstances at the time of the application are attributable to enhanced earnings or financial benefits received from any source since the date of the order; 9) Whether a temporary remedy should be fashioned to provide adjustment of the support award from which modification is sought, and the terms of any such adjustment, pending continuing employment investigations by the unemployed spouse or partner; and 10) Any other factor the court deems relevant to fairly and equitably decide the application. N.J.S.A. 2A:34-23 (k).

Self-Employed Obligors Seeking Modification

When a self-employed party seeks modification of alimony because of an involuntary reduction in income since the date of the order from which modification is sought, then that party's application for relief must include an analysis that sets forth the economic and non-economic benefits the party receives from their business, and compare the economic and non-economic benefits to those that were in existence at the time of the entry of the order. N.J.S.A. 2A:34-23(i).

Cohabitation

The amendment to the statute creates a much easier burden for an obligor bringing a claim for cohabitation. Most importantly, a court may now not find an absence of cohabitation solely on grounds that the couple does not live together on a full-time basis. N.J.S.A. 2A:34-23(n). In evaluating whether cohabitation is occurring, and whether alimony should be suspended or terminated, the court must consider the length of the relationship. Id. Cohabitation is defined as “a mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.” Id.

Under the amended statute, courts must now consider eight factors in order to determine whether or not cohabitation exists including: 1) Intertwined finances such as joint bank accounts and other joint holdings or liabilities; 2) Sharing or joint responsibility for living expenses; 3) Recognition of the relationship in the couple's social and family circle; 4) Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive intimate personal relationship; 5) Sharing household chores; 6) Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of subsection (h) of N.J.S.A. 25:1-5; and 7) All other relevant evidence. N.J.S.A. 2A:34-23(n).

National Alimony Reform

From a national perspective, alimony reformation began to undergo changes in the last half of the 20th century in many states, including time limits on alimony obligations and greater flexibility to modify awards. In several states, including Maine, Florida and Massachusetts, legislatures have successfully changed their states' alimony laws to reflect this evolution.

In 2010, the Florida Legislature made several major revisions to the state's alimony statute that were applicable to initial alimony awards in cases pending on or filed after July 1, 2010. Fla. Stat. ' 61.08 (2010). Under the new law, the duration of a marriage for purposes of an alimony award is now characterized by statute as short-term, if the marriage was less than seven years, moderate-term, if the marriage was between seven and 17 years, and long-term, if the marriage was more than 17 years. Fla. Stat. Ann. ' 61.08 (4) (2010). In addition, with the enactment of the 2010 amendment, a judge may now consider three additional statutory factors, namely the responsibilities each party has with regard to any minor children they have in common; 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 nontaxable, nondeductible payment; and the sources of income available to either party including income available to either party through investments of any asset held by that party. Id .

In Massachusetts, previous alimony laws provided for permanent alimony but a reform bill was passed unanimously by the legislature and signed into law on Sept. 26, 2011. Mass. Gen. Laws Ann. 208 ' 49 (2011). The law provides for different categories of alimony, and limits the duration of alimony. “General term alimony” is “the periodic payment of support to a recipient spouse who is economically dependent.” Mass. Gen. Laws Ann. 208 ' 48 (2011).

Section (b) of the Massachusetts law provides that if the length of the marriage is 20 years or less, “general term alimony shall terminate no later than a date certain under the following durational limits; for a marriage lasting 5 years or less, general term alimony shall continue for not longer than one-half the number of months of the marriage; for a marriage lasting 10 years or less, but more than 5 years, general term alimony shall continue for not longer than 60 per cent of the number of months of the marriage; for a marriage lasting 15 years or less, but more than 10 years, general term alimony shall continue for not longer than 70 per cent of the number of months of the marriage; and, for a marriage lasting 20 years or less, but more than 15 years, general term alimony shall continue for not longer than 80 per cent of the number of months of the marriage.” Mass. Gen. Laws Ann. 208 ' 49 (2011).

In Maine, a “no-fault” divorce state, Statute ' 951-A provides that for marriages or civil unions between 10 and 20 years, alimony is limited to a period equal to half the length of the marriage. Me. Rev. Stat. tit. 19-A, ' 951-A. There are several types of spousal support: general support, transitional support, reimbursement support, interim support and nominal support. Section 951-A (2) A (1) states that “[t]here is a rebuttable presumption that general support may not be awarded if the parties were married for less than 10 years as of the date of the filing of the action for divorce.” And in addition, “[t]here is also a rebuttable presumption that general support may not be awarded for a term exceeding ' the length of the marriage if the parties were married for at least 10 years but not more than 20 years as of the date of the filing of the action for divorce.” Id .

In Texas, there is a statutory presumption against spousal maintenance unless “the spouse seeking maintenance has exercised diligence in: 1) earning sufficient income to provide for the spouse's minimum reasonable needs; or 2) developing the necessary skills to provide for the spouse's minimum reasonable needs during a period of separation and during the time the suit for dissolution of the marriage is pending.” Tex. Fam. Code Ann. ' 8.053 (2011). A court may not order alimony for more than five years if the parties were married for less than 10 years, and for parties married 10 years but not more than 20 years. Tex. Fam. Code Ann. ' 8.054 (2011). A court may not order alimony for more than seven years if the parties were married 20 years but not more than 30 years, and not more than 10 years if the parties were married 30 years or more. Id .

Conclusion

Only time will tell if this amendment is really a turning point in New Jersey alimony law or “much ado about nothing.” Either way, it is imperative that family law practitioners consider and understand these changes to the alimony law.

Jennifer Presti is an associate with Mandelbaum Salsburg, P.C. and a member of the Family Law Dept.

After almost three years of legislative debate over proposed versions of the law, alimony reform has now come to New Jersey. On Sept. 10, 2014, Governor Chris Christie signed into law L.2014, c. 42, ' 1, amending N.J.S.A. 2A:34-23, which went into immediate effect. This article reviews the reform of the New Jersey Alimony Statute, and discusses how those changes compare with the reform of alimony laws in other states.

'Open Durational' and Additional Statutory Factors

In what is considered the most substantial modification to the statute, the term “permanent alimony” was replaced with the term “open durational alimony.” N.J.S.A. 2A:34-23(b). Open durational alimony is reviewed, along with rehabilitative, limited duration, and reimbursement alimony, based on the amended statutory factors that are all to be equally weighted unless a judge, in his or her discretion as the finder of fact, determines that one factor is more or less relevant in a particular case in making an alimony determination.

The list of amended statutory factors are as follows: 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, with neither party having a greater entitlement to that standard of living than the other; 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; 13) the nature, amount, and length of pendente lite support paid, if any; and 14) any other factors which the court may deem relevant. N.J.S.A. 2A:34-23(b).

Importantly, the newly codified additions to the enumerated factors include that a court must consider the nature, amount, and length of pendente lite support paid during a divorce proceeding when rendering a final alimony award. Id. at (b)(13). Therefore, with courts now required to consider how long temporary support was paid in determining a final alimony award, a spouse who is receiving monthly support payments on a temporary basis during a divorce proceeding, biding his or her time with the view that it will not impact the overall duration of a final alimony award, should now be deterred from doing so.

Although courts are to consider the standard of living established during the marriage, it is now clear that neither party has a greater right to the marital standard of living than the other. N.J.S.A. 2A:34-23(b) (4). A court reviewing an alimony request should “assess evidence with respect to all relevant statutory factors.” N.J.S.A. 2A:34-23(b), (c). The statute states that “[n]o factor shall be elevated in importance over any other factor unless the court finds otherwise.” Id. Further, the legislature requires judges to “make specific findings of fact and conclusions of law” as to the reasons that the court reached a conclusion that certain factors were more or less relevant than others when making an award. Id.

Section (b) further states that “[w]hen a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony.”

In addition to the factors listed in section (b) of the statute, courts are instructed to “also consider the practical impact of the parties' need for separate residences, and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living established in the marriage or civil union, to which both parties are entitled, with neither party having a greater entitlement thereto.” N.J.S.A. 2A:34-23(c). This is likely a resultant effect of the decision in Crews v. Crews , where the New Jersey Supreme Court held that a finding in respect to the marital standard of living was required and that “the standard was whether the supported spouse can maintain a lifestyle that is reasonably comparable to the standard of living enjoyed during the marriage.” Crews v. Crews, 164 N.J. 11, 17 (2000).

At the time, the New Jersey Supreme Court noted that “[i]f the supported spouse cannot, and if the supporting spouse's financial condition permits, a modification to the support award is appropriate and warranted.” Id. Consequently, this led courts to elevate the marital lifestyle above the other enumerated factors and it also led to the misconception that the supported spouse was the only one entitled to maintaining the marital standard of living. The amendment to the statute clarifies that neither party has a greater entitlement to the standard of living, nor a reasonably comparable standard of living, with that established during the marriage by taking into consideration that the parties will each have to support separate residences.

Determining Alimony Duration and Exceptional Circumstances

The amendment to section (c) of N.J.S.A. 2A:34-23 directs that an alimony award cannot exceed the length of a marriage when the duration of the marriage was less than 20 years, except in “exceptional circumstances.” A list of “exceptional circumstances” that may require an adjustment to the duration of alimony are now enumerated and include: 1) the ages of the parties at the time of the marriage or civil union and at the time of the alimony award; 2) the degree and duration of the dependency of one party on the other party during the marriage or civil union; 3) whether a spouse or partner has a chronic illness or unusual health circumstance; 4) whether a spouse or partner has given up a career or a career opportunity or otherwise supported the career of the other spouse or partner; 5) whether a spouse or partner has received a disproportionate share of the marital estate; 6) the impact of the marriage or civil union on either party's ability to become self-supporting, including but not limited to either party's responsibility as primary caretaker of a child; 7) tax considerations of either party; and 8) any other factors or circumstances that the court deems equitable, relevant and material. Id.

This change to the law may have gained momentum after Gnall v. Gnall was decided by the Appellate Division. 432 N.J. Super. 129 (App. Div. 2013), granting cert. 217 N.J. 52 (2014). In Gnall, there was a 15-year marriage that the appellate division considered long-term, warranting an award of permanent alimony, and a list of extenuating circumstances. Id. The Gnall case is currently pending before the Supreme Court of New Jersey, and the court's opinion will likely review the exceptional circumstances in Gnall using the newly minted statutory factors as a guide, giving these factors more depth for family law practitioners.

Prospective Application of The Statute

Importantly, the amended statute should not be construed either to modify the duration of alimony ordered, or agreed upon, or other specifically bargained for contractual provisions that have been incorporated into a final judgment of divorce or dissolution, a final order that has concluded post-judgment litigation, or any enforceable written agreement between the parties. N.J.S.A. 2A:34-23. Therefore, with regard to alimony awards, the law will apply only to divorces currently pending and future divorces. However, the amended statute will apply to applications to modify alimony obligations based upon the changes of circumstances and retirement of the obligor.

Actual or Prospective Retirement

While there is extensive case law on the subject of a retiring obligor's ability to modify or terminate his or her alimony obligation, the newly codified language of sections (j) (1) & (2) of N.J.S.A. 2A:34-23 provide an unmistakably discernable path for retiring obligor's applications, while decreasing their burden in obtaining relief.

A definitive good-faith age for retirement is added to the statute, which is determined by the currently required age of eligibility or “full retirement age” to receive full retirement benefits under section 216 of the Federal Social Security Act. 42 U.S.C. s.416. Full retirement age (also called “normal retirement age”) had been 65 for many years; however, beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959. Id.

The new statutory language provides that “[a]limony may be modified or terminated upon the prospective or actual retirement of the obligor,” and, that “there shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age ' ” N.J.S.A. 2A:34-23(j) (1).

However, the rebuttable presumption that alimony terminates once the obligor spouse reaches full retirement age can be overcome, and alimony duration can be set to a different date based on a showing of “good cause,” where a court makes “specific written findings of fact and conclusions of law.” N.J.S.A. 2A:34-23(j) (1). The statute proceeds to list the factors that the court must review in making that finding including: 1) The ages of the parties at the time of the application for retirement; 2) The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award; 3) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union; 4) Whether the recipient has foregone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award; 5) The duration or amount of alimony already paid; 6) The health of the parties at the time of the retirement application; 7) Assets of the parties at the time of the retirement application; 8) Whether the recipient has reached full retirement age as defined in this section; 9) Sources of income, both earned and unearned, of the parties; 10) The ability of the recipient to have saved adequately for retirement; and 11) Any other factors that the court may deem relevant. Id.

If the court determines that upon good cause shown the presumption has been overcome, then “the court shall apply the alimony factors as set forth in subsection b. of the statute to the parties' current circumstances in order to determine whether modification or termination of alimony is appropriate.” Id. Any arrearages that have accrued prior to the termination date shall not be vacated or annulled based on a termination of alimony upon retirement. Id. Further, “[i]f the obligor intends to retire but has not yet retired the court shall establish the conditions under which the modification or termination of alimony will be effective.” N.J.S.A. 2A:34-23 (j) (1).

Under section (j) (2) of N.J.S.A. 2A:34-23, when an obligor seeks to retire prior to reaching full retirement age, the obligor has the burden of demonstrating by a preponderance of the evidence that the prospective or actual retirement is “reasonable” and “made in good faith.” In order to determine whether the obligor has met that burden, the court should consider the following factors: 1) The age and health of the parties at the time of the application; 2) The obligor's field of employment and the generally accepted age of retirement for those in that field; 3) The age when the obligor becomes eligible for retirement at the obligor's place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits; 4) The obligor's motives in retiring, including any pressures to retire applied by the obligor's employer or incentive plans offered by the obligor's employer; 5) The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution; 6) The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours; 7) The obligee's level of financial independence and the financial impact of the obligor's retirement upon the obligee; and 8) Any other relevant factors affecting the obligor's decision to retire and the parties' respective financial positions. N.J.S.A. 2A:34-23 (j) (2).

Section (j) (3) of N.J.S.A. 2A:34-23 deals with a retirement application where an existing final alimony order or enforceable written agreement was established prior to the effective date of the amendment. This section makes clear that there is no rebuttable presumption of termination upon the retirement of an obligor when such an agreement exists.

Now, when an application for termination or modification of alimony based on retirement is filed where an existing final alimony order or enforceable written agreement exists, the court must consider the “ability of the obligee to have saved adequately for retirement.” N.J.S.A. 2A:34-23(j) (3). And, the obligor must demonstrate by a preponderance of the evidence that modification or termination of alimony is appropriate based on the following factors; 1) The age and health of the parties at the time of the application; 2) The obligor's field of employment and the generally accepted age of retirement for those in that field; 3) The age when the obligor becomes eligible for retirement at the obligor's place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits; 4) The obligor's motives in retiring, including any pressures to retire applied by the obligor's employer or incentive plans offered by the obligor's employer; 5) The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution; 6) The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours; 7) The obligee's level of financial independence and the financial impact of the obligor's retirement upon the obligee; and 8) Any other relevant factors affecting the parties' respective financial positions. N.J.S.A. 2A:34-23(j) (3) (a)-(h).

The addition of N.J.S.A. 2A:34-23(j) (4) affirms that assets distributed between the parties at time of entry of a final order of divorce or dissolution of a civil union shall not be considered by a court when determining the parties' ability to pay alimony upon retirement.

Reduction of Income

Predating the amendment, the alimony statute stated that “[o]rders may be revised and altered by the court from time to time as circumstances may require.” N.J.S.A. 2A:34'23. Thus, alimony obligations, whether set in judicial orders or parties' agreements were “always subject to review and modification on a showing of 'changed circumstances.'” Lepis v. Lepis , 83 N.J. 139, 146 (1980). Lepis stated that “[w]hen the movant is seeking modification of an alimony award, that party must demonstrate that changed circumstances have substantially impaired the ability to support himself or herself.” Id. at 157. In light of Lepis, courts are required to consider several factors to determine whether an alleged loss of income constitutes a “substantial and continuing” change in circumstance meriting further analysis and, ultimately, a potential alimony modification. Lepis, 83 N.J. 139, 146 (1980).

However, there was no conclusive period for what constituted “continuing,” defined in Lepis or subsequent case law. Under section (k) of the amended statute, now applications by non-self-employed parties may be filed when they have been unemployed, or have not been able to return to or attain employment at prior income levels, or both, for a period of 90 days. N.J.S.A. 2A:34-23(k). In addition, courts now have the discretion to make any relief granted retroactive to the date of the loss of employment or reduction of income for a non-self-employed party after the consideration of the enumerated factors. Id.

Non ' Self-Employed Obligors

When a W2, 1099, or other non-self-employed party seeks modification of alimony, the court shall consider the following factors: 1) The reasons for any loss of income; 2) Under circumstances where there has been a loss of employment, the obligor's documented efforts to obtain replacement employment or to pursue an alternative occupation; 3) Under circumstances where there has been a loss of employment, whether the obligor is making a good faith effort to find remunerative employment at any level and in any field; 4) The income of the obligee; the obligee's circumstances; and the obligee's reasonable efforts to obtain employment in view of those circumstances and existing opportunities; 5) The impact of the parties' health on their ability to obtain employment; 6) Any severance compensation or award made in connection with any loss of employment; 7) Any changes in the respective financial circumstances of the parties that have occurred since the date of the order from which modification is sought; 8) The reasons for any change in either party's financial circumstances since the date of the order from which modification is sought, including, but not limited to, assessment of the extent to which either party's financial circumstances at the time of the application are attributable to enhanced earnings or financial benefits received from any source since the date of the order; 9) Whether a temporary remedy should be fashioned to provide adjustment of the support award from which modification is sought, and the terms of any such adjustment, pending continuing employment investigations by the unemployed spouse or partner; and 10) Any other factor the court deems relevant to fairly and equitably decide the application. N.J.S.A. 2A:34-23 (k).

Self-Employed Obligors Seeking Modification

When a self-employed party seeks modification of alimony because of an involuntary reduction in income since the date of the order from which modification is sought, then that party's application for relief must include an analysis that sets forth the economic and non-economic benefits the party receives from their business, and compare the economic and non-economic benefits to those that were in existence at the time of the entry of the order. N.J.S.A. 2A:34-23(i).

Cohabitation

The amendment to the statute creates a much easier burden for an obligor bringing a claim for cohabitation. Most importantly, a court may now not find an absence of cohabitation solely on grounds that the couple does not live together on a full-time basis. N.J.S.A. 2A:34-23(n). In evaluating whether cohabitation is occurring, and whether alimony should be suspended or terminated, the court must consider the length of the relationship. Id. Cohabitation is defined as “a mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.” Id.

Under the amended statute, courts must now consider eight factors in order to determine whether or not cohabitation exists including: 1) Intertwined finances such as joint bank accounts and other joint holdings or liabilities; 2) Sharing or joint responsibility for living expenses; 3) Recognition of the relationship in the couple's social and family circle; 4) Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive intimate personal relationship; 5) Sharing household chores; 6) Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of subsection (h) of N.J.S.A. 25:1-5; and 7) All other relevant evidence. N.J.S.A. 2A:34-23(n).

National Alimony Reform

From a national perspective, alimony reformation began to undergo changes in the last half of the 20th century in many states, including time limits on alimony obligations and greater flexibility to modify awards. In several states, including Maine, Florida and Massachusetts, legislatures have successfully changed their states' alimony laws to reflect this evolution.

In 2010, the Florida Legislature made several major revisions to the state's alimony statute that were applicable to initial alimony awards in cases pending on or filed after July 1, 2010. Fla. Stat. ' 61.08 (2010). Under the new law, the duration of a marriage for purposes of an alimony award is now characterized by statute as short-term, if the marriage was less than seven years, moderate-term, if the marriage was between seven and 17 years, and long-term, if the marriage was more than 17 years. Fla. Stat. Ann. ' 61.08 (4) (2010). In addition, with the enactment of the 2010 amendment, a judge may now consider three additional statutory factors, namely the responsibilities each party has with regard to any minor children they have in common; 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 nontaxable, nondeductible payment; and the sources of income available to either party including income available to either party through investments of any asset held by that party. Id .

In Massachusetts, previous alimony laws provided for permanent alimony but a reform bill was passed unanimously by the legislature and signed into law on Sept. 26, 2011. Mass. Gen. Laws Ann. 208 ' 49 (2011). The law provides for different categories of alimony, and limits the duration of alimony. “General term alimony” is “the periodic payment of support to a recipient spouse who is economically dependent.” Mass. Gen. Laws Ann. 208 ' 48 (2011).

Section (b) of the Massachusetts law provides that if the length of the marriage is 20 years or less, “general term alimony shall terminate no later than a date certain under the following durational limits; for a marriage lasting 5 years or less, general term alimony shall continue for not longer than one-half the number of months of the marriage; for a marriage lasting 10 years or less, but more than 5 years, general term alimony shall continue for not longer than 60 per cent of the number of months of the marriage; for a marriage lasting 15 years or less, but more than 10 years, general term alimony shall continue for not longer than 70 per cent of the number of months of the marriage; and, for a marriage lasting 20 years or less, but more than 15 years, general term alimony shall continue for not longer than 80 per cent of the number of months of the marriage.” Mass. Gen. Laws Ann. 208 ' 49 (2011).

In Maine, a “no-fault” divorce state, Statute ' 951-A provides that for marriages or civil unions between 10 and 20 years, alimony is limited to a period equal to half the length of the marriage. Me. Rev. Stat. tit. 19-A, ' 951-A. There are several types of spousal support: general support, transitional support, reimbursement support, interim support and nominal support. Section 951-A (2) A (1) states that “[t]here is a rebuttable presumption that general support may not be awarded if the parties were married for less than 10 years as of the date of the filing of the action for divorce.” And in addition, “[t]here is also a rebuttable presumption that general support may not be awarded for a term exceeding ' the length of the marriage if the parties were married for at least 10 years but not more than 20 years as of the date of the filing of the action for divorce.” Id .

In Texas, there is a statutory presumption against spousal maintenance unless “the spouse seeking maintenance has exercised diligence in: 1) earning sufficient income to provide for the spouse's minimum reasonable needs; or 2) developing the necessary skills to provide for the spouse's minimum reasonable needs during a period of separation and during the time the suit for dissolution of the marriage is pending.” Tex. Fam. Code Ann. ' 8.053 (2011). A court may not order alimony for more than five years if the parties were married for less than 10 years, and for parties married 10 years but not more than 20 years. Tex. Fam. Code Ann. ' 8.054 (2011). A court may not order alimony for more than seven years if the parties were married 20 years but not more than 30 years, and not more than 10 years if the parties were married 30 years or more. Id .

Conclusion

Only time will tell if this amendment is really a turning point in New Jersey alimony law or “much ado about nothing.” Either way, it is imperative that family law practitioners consider and understand these changes to the alimony law.

Jennifer Presti is an associate with Mandelbaum Salsburg, P.C. and a member of the Family Law Dept.