New Law Ends Permanent Alimony – By: John P. Paone, Jr., Esq. and Megan S. Murray, Esq.

For more than two years now, there has been much debate over how to amend New Jersey’s alimony laws. The culmination of this debate was the passage of a revised alimony statute, which was signed into law by Governor Christie on September 10, 2014. The most significant change is the elimination of permanent alimony.

Under prior law, the court had the discretion to award permanent alimony in any case. Permanent alimony would continue indefinitely, often times only ending upon the death of the payor or remarriage of the recipient. Under the new law, permanent alimony has been eliminated. Now, parties who have been married for less than 20 years, cannot receive alimony for a period longer than the duration of the marriage. Indeed, the Court must find there to be “exceptional circumstances” in order for alimony to exceed the length of the marriage, such as whether one spouse has a chronic illness or unusual health circumstance and whether one spouse has received a disproportionate share of the marital estate.

Parties in marriages of 20 years duration or more can qualify for what is now called “open durational alimony” which is alimony without a definitive end. However, considering that the average divorce involves marriages of much fewer than 20 years duration, the new law will result in a major reduction in the duration of alimony awards.

Many people have inquired how the new law regarding the duration of alimony affects prior divorce judgments or settlement agreements. The answer is, it does not. The new law is entirely prospective, meaning that if your case was concluded prior to September 10, 2014, it will not change the duration of the alimony in your matter.

The revised alimony statute also addresses what happens upon the retirement of the payor spouse. It is now “a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age….” The statute defines “full retirement age” as the age at which a person is eligible to receive full retirement benefits under the Social Security Act. For most people, this will mean an end to alimony at age 67. However, the presumption that alimony shall terminate upon the obligor’s obtaining full retirement age can be overcome upon consideration of a host of factors, including but not limited to the ages of the parties at the time of the application for retirement; the level of economic dependency of one spouse on the other; the health of the parties at the time of the application for retirement; the assets held by each party at the time of the application; and other factors as enumerated in the statute. The change in the law regarding retirement applies to all cases, including individuals who were divorced prior to September 10, 2014.

The new statute also addresses what happens when an alimony obligor becomes unemployed. When an obligor is unemployed for at least 90 days, an application to reduce support shall be considered by the Court. When such an application is filed, the court is then required to determine whether a modification in the amount of alimony is appropriate by looking at factors including the reason for the loss of employment; continued efforts to find substitute employment; and any severance compensation award in connection with the loss of employment. This is a major departure from prior law which viewed unemployment as only a temporary event not worthy of modifying a party’s obligation to pay alimony or child support.

Whereas the prior alimony statute did not address the controversial issue regarding the modification of alimony as the result of cohabitation (that is, a person receiving alimony living with another without the benefit of marriage), the revised statute addresses this issue head on. The new law provides that alimony may be suspended or terminated if a person receiving alimony cohabits with another person. The court is required to consider several factors in determining whether cohabitation exists, including but not limited to whether the parties are living together; have intertwined finances; share living expenses; recognition of the relationship in the couple’s social circle; the frequency of contact; and the duration of the relationship.

The revised alimony statute unquestionably provides greater guidance to parties going through a divorce. Individuals contemplating or going through the divorce process should discuss with their attorneys the specific impact of the revised alimony statute on their case.