Introduction

While divorce may effectively sever the bonds of matrimony in almost every respect, child support payments and alimony frequently linger as a long-lasting financial connection that binds ex-spouses for years to come.

New Jersey’s Alimony Reform Act, passed in September of 2014, and signed into law, has caused many divorced parties to wonder how their rights and obligations have changed or will change in the future. Among the most frequently asked questions is the extent to which new relationships, remarriage, retirement, and cohabitation impact alimony obligations.

Remarriage by recipient does NOT automatically end alimony payments from an ex-spouse

By law, a former spouse’s death terminates the alimony obligation. In fact, the parties’ failure to include in a Settlement Agreement or Consent Order the death of a former spouse as a triggering event for alimony termination, the IRS will disallow an alimony deduction for the payor.

Contrary to common perception, however, an ex-spouse’s remarriage only triggers an alimony termination if the parties’ Agreement so states, explicitly. Payor spouses must include this provision if they wish to protect themselves from continuing to support an ex-spouse who may begin a new life with their next marital partner.

While this provision is almost always included in a Settlement Agreement or Consent Order, there may be instances in which payors permit ex-spouses to continue to receive alimony after remarriage. An example is a long term marriage in which the recipient is clearly entitled to open durational alimony (a term discussed below), yet the payor wishes to limit alimony to a lesser term of years. Paying the supported spouse even after remarriage could make sense in that case. I have negotiated alimony deals like that. It is rare but it does happen.

Remarriage by payor spouse does NOT affect alimony payments

When a payor remarries, this generally has no effect on alimony obligations to an ex-spouse.

What will qualify for alimony reduction or elimination are instances when a paying spouse unexpectedly can’t meet his or her financial obligations. In those cases, a court may consider downwardly adjusting alimony.

The most common reasons for such adjustments are loss of a job, disability without disability insurance, or other significant decreases in income.

The new alimony statute requires 90-days minimum before the obligor may apply for alimony reduction based upon a loss of employment. A self-employed person faces a more rigorous standard of review, since the presumption is they have a greater ability to cause their own financial downturn.

New law means caps on alimony

Under New Jersey’s alimony reform law, “permanent alimony” has been eliminated moving forward, with the term of alimony not to exceed the length of the marriage or the civil union for relationships that last 20 years or less. Payments also generally end when the payor retires at “normal” retirement age, which is approximately 66.

Agreements or Final Judgments of Divorce entered under prior law will not be disturbed solely by the advent of the new statute. However, it is inescapable that lawyers and judges will fall back on the standards and factors under the new statute when considering requests to modify a pre-existing document.

The new alimony term of art for marriages longer than 20 years is “open durational alimony”, which implies that the alimony door will close at some point (as contrasted with previous law, in which it was difficult for many retirees to persuade judges to stop their alimony obligations, in some cases even for payors over the age of 80).

New rules apply regarding retirement

Retirees under the new law may file advance application for termination of alimony, and there is now a legal presumption that a retiree is entitled to stop paying alimony at age 66. The recipient may oppose the termination, but the burden switches to the recipient to show good cause for continued alimony at that point, such as the retirement claim is false or exaggerated, or the retiree has accumulated significant assets post-divorce that have not been divided as part of equitable distribution, and the dependent spouse will suffer financial devastation by comparison. These cases and issues are very fact sensitive and will develop an entirely new set of precedents over time.

Cohabitation by any other name . . .

Another major change under the new law relates to cohabitation, the definition of which has been expanded under the new statute. Under the terms of the reform law, courts will consider cohabitation factors such as:

• Commingling of finances, including shared back accounts, credit cards, rent payments, or mortgages;
• The extent to which the relationship is known within social and family circles, as evidenced by time spent during holidays and other factors;
• The length of the relationship.

Whether or not the cohabiting couple actually lives together or how often they spend overnights is not dispositive under the new law. It is the quality, not the quantity, of relationship factors that counts.

Conclusion

The new statute will require years of testing, litigation, and appeals to attain definitive status. Yet there is no doubt that the New Jersey Legislature intended to provide predictability and relief for payors as much as reasonably possible, while still caring for the needs of dependent spouses. My office and I have long supported alimony reform, not to favor one gender or disfavor the other (noting that members of both sexes are alimony payors and recipients), but rather to cut down on gamesmanship and deception some parties used in the past to continue receiving or stop paying support — despite having moved on.

If our office may be helpful to you in reviewing the facts, explaining the law, and advising you of your chances of success on the merits, whether in negotiations, mediation, arbitration, collaborative law practice, trial, or post-judgment modification, please do not hesitate to write or call us. We will be glad to assist you, which is our purpose in being.