After a nearly unanimous vote in the New Jersey Senate, Governor Chris Christie signed into law a comprehensive set of New Jersey alimony reforms. This will impact our Family Law practice, and in a very welcome way. Almost all involved (as well as commentators) agreed that alimony laws in New Jersey were over-due for a much-needed overhaul. There are now substantial changes to how alimony is set in New Jersey, and these changes take effect immediately. Below we discuss a few of the important changes.
There have always been a number of factors that the court would take into account when setting alimony. One of those factors is the likelihood that each party can maintain the same standard of living as they enjoyed during the marriage. The new law makes it clear that neither party has the greater entitlement to maintaining the same standard of living. This addressed the unfairness that would occur when one spouse, who was making most or all of the family income, would suffer a significant lowering of their standard of living in order to keep the other spouse living the same as they did during the marriage. Also, the law now says that none of the 14 factor is more important than the others. However, the judge may rule that one or a few are more important than the other, but only if the judge can make specific written findings to support that decision. Further, it previously was the case that the judge only needed to make specific written findings in cases of permanent alimony. But now, this needs to be done in all cases of alimony.
For marriages lasting less than 20 years, the award of alimony, except in exceptional circumstances, will be for a limited duration that cannot last longer than the length of the marriage. So, for example, if a marriage lasted 10 years then alimony will generally be capped at a 10 year term. This is a completely new addition to the law.
The law now prohibits modification of reimbursement alimony. That type of alimony is used when one spouse supports the other spouse’s educational pursuits, in anticipation of the higher income that would be collected later in life. If the court rules that the spouse who benefited from this should pay back the other spouse who supported the couple in the past, then the court cannot change the decision later on.
Permanent alimony has also been essentially done away with. Now, it is seen as “open duration” alimony. And this is because the law now includes extensive language about alimony awards and retirement. In the past, retiring did not necessary end the alimony. Now, alimony awards may be modified upon retirement, and there is a presumption that alimony should terminate once the paying spouse reaches full retirement age. However, there are a number of factors that the court may consider if the other spouse wants to continue receiving alimony after retirement. It would be the burden of the spouse receiving the alimony to demonstrate why alimony should continue after retirement age. And if the court agrees, then the court must conduct a completely new analysis about what the alimony amount should be, and the term of the new alimony. Also, there is now a process for terminating alimony in the event of an early retirement. The paying spouse may make an application and would then have to satisfy the factors listed in the statute.
The biggest change is how the law now addresses the factors to be considered when a spouse paying alimony loses or involuntarily changes their job. The alimony cannot be changed unless the job loss was at least 90 days in the past. And then, the court is instructed to evaluate the listed factors in the statute, including the income of the receiving spouse and the paying spouse’s ability to get a job at the same income level that they previously had. The court is instructed to evaluate all of the factors. This addressed the unfairness that sometimes occurred when a person lost a job and was never able to get a job at that income level – they would be stuck paying alimony as if they were still making their previous salary. In fact, there have been many cases where spouses made applications for alimony modification based on involuntary employment changes, and the courts have essentially told the people to “work harder” or “find another job”. Now, the court would need to analyze all of the statutory factors before making the decision.
The new law also makes clear that alimony may be suspended or terminated upon cohabitation. Previously, alimony always terminated upon remarriage. The parties had the option of adding a stipulation in a divorce settlement that it would also terminate upon cohabitation. But now, that is the default under the law, and the law has a listed number of factors to consider when a court has to decide whether two people are “cohabiting” under the law.
We are confident that these new changes will be helpful to our clients and provide much-needed guidance and clarification to the courts and all litigants.