Alimony

Paper money, extreme macro

The termination of a marriage involves an economic mosaic comprised of equitable distribution, alimony and child support, and these financial components interface.

Alimony is a claim arising upon divorce, which is rooted in the prior interdependence occurring during the parties’ marital relationship. Thus, alimony is awarded because of an actual economic dependency and not because of one’s status as a spouse; and, alimony is neither a punishment for the payor nor a reward for the payee.

The goal of an alimony award is to allow the dependent spouse the ability to continue the standard of living established during the marriage.

In a matrimonial action, the trial court may award one or more of the following types of alimony to either party: (1) permanent alimony; (2) rehabilitative alimony; (3) limited duration alimony or (4) reimbursement alimony.

When awarding alimony, the court must consider the following:

(1) The actual need and ability of the parties to pay;

(2) The duration of the marriage;

(3) The age, physical and emotional health of the parties;

(4) The standard of living established in the marriage and the likelihood that each party can maintain a reasonably comparable standard of living;

(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 nonfinancial contributions to the marriage 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 payments 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; and

(13) Any other factors which the court may deem relevant.

The court must determine equitable distribution first, as the distribution of property is a factor in determining alimony, but alimony is not a factor in determining equitable distribution.

Life Insurance

Trial courts are specifically authorized to order either spouse to maintain life insurance for the protection of the former spouse in the event of the payor spouse’s death. The purpose is to assure a sufficient fund for the payor’s support obligation should he or she die before fulfilling that responsibility. The death benefit requirement may be tailored to the payor’s projected remaining obligation; e.g., a supported spouse receiving limited duration alimony is not entitled to full death benefit of insurance provided to secure alimony payment, but only an amount equal to remaining alimony obligation.

Ability To Pay Alimony

In determining ability to pay alimony, other factors besides present earnings are considered, including the potential to generate income, real property, capital assets, investment portfolio and capacity to earn by diligent attention to business.

Permanent Alimony

Permanent alimony is awarded after a lengthy marriage for unlimited duration in recognition of prolonged economic dependence and sustained contribution to a marital enterprise.

By definition, permanent alimony terminates or changes only when there is a finding of changed circumstances.

Limited Duration Alimony

Limited duration alimony is available to a dependent spouse who made contributions to a relatively short-term marriage that demonstrated the attributes of a marital partnership and has the skills and education necessary to return to the workforce. Such a spouse is not entitled to permanent alimony because the commitment to the marital enterprise was not sustained and the period of economic dependency was not prolonged.

Both limited duration and permanent alimony reflect the policy that marriage is an economic and social partnership and that the financial and non-financial contributions of both spouses should be recognized. All other statutory factors being in equipoise, the duration of the marriage marks the defining distinction between whether permanent or limited duration alimony is warranted and awarded.

Limited duration alimony is not intended to be a replacement for permanent alimony where the length of the marriage and the contributions made by the dependent spouse are significant. In particular, it is singularly inappropriate in long marriages.

The length of a limited duration alimony award may not be modified, except in unusual circumstances, which requires a heightened showing.

Rehabilitative Alimony

The purpose of rehabilitative alimony is to exert fair and compassionate pressure upon a dependent spouse, absent unusual circumstances, to develop marketable skills and obtain employment which will enable him or her to contribute, in whole or in part, to his or her support. Unlike permanent alimony, rehabilitative alimony is short-term and terminates once the dependent spouse is capable of self-support.

Because the objective of rehabilitative alimony is to enhance the earning capacity of the dependent spouse, a court’s assessment must focus upon the ability of a dependant spouse to engage in gainful employment, combined with the length of the marriage, the age of the parties, and the spouse’s ability to regain a place in the workplace.

The goal of rehabilitative alimony is to produce a selfsufficient individual, benefiting not only the recipient of the alimony, but the person paying the alimony.

Reimbursement Alimony

As a general principle, courts do not support reimbursement between former spouses in alimony proceedings. Marriage is not a business arrangement in which the parties keep track of debits and credits, their accounts to be settled upon divorce. Rather, marriage is a shared enterprise, a joint undertaking; in many ways, it is akin to a partnership.

But, every joint undertaking has its bounds of fairness. Where a partner to a marriage takes the benefits of his or her spouse’s support in obtaining a professional degree or license with the understanding that future benefits will accrue and inure to both of them, and the marriage is then terminated without the supported spouse giving anything in return, an unfairness occurres that calls for a remedy.

To provide a fair and effective means of compensating a spouse who has suffered a loss or reduction of support, or has incurred a lower standard of living, or has been deprived of a better standard of living in the future, reimbursement alimony may be the appropriate remedy. Regardless of the appropriateness of permanent alimony or the presence or absence of marital property to be equitably distributed, there are circumstances where a supported spouse should be reimbursed for the financial contributions he or she made to the spouse’s successful professional training. Such reimbursement alimony should cover all financial contributions towards the former spouse’s education, including household expenses, educational costs, school travel expenses and any other contributions used by the spouse in obtaining his or her degree or license.

Not every spouse who contributes toward his or her partner’s education or professional training is entitled to reimbursement alimony. Only monetary contributions made with the mutual and shared expectation that both parties to the marriage will derive increased income and material benefits should be a basis for such an award.

Reimbursement alimony will not always be appropriate or necessary to compensate a spouse who has contributed financially to the partner’s professional education or training. In cases where a spouse gave up or postponed his or her own education to support the household, a lump sum or a short-term award to achieve economic self-sufficiency may be more appropriate — in those cases, rehabilitative alimony (in contrast to reimbursement alimony) should be considered.

Alimony Modification

An award of alimony remains subject to judicial review and, if warranted, modification by the court, when either party experiences a substantial change in financial circumstances.

When a supporting spouse seeks to reduce the alimony payment, the supporting spouse must demonstrate that changed circumstances have substantially impaired the supporting spouse’s ability to support himself or herself. However, to make an initial showing of changed circumstances, it is not enough that an obligor demonstrate a reduction in income; the obligor must also demonstrate how he or she has attempted to improve the diminishing circumstances.

Cohabitation

Cohabitation may be a basis for the termination of alimony. However, a mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. Such an agreement must be predicated on a relationship of cohabitation that can be shown to have stability, permanency, and mutual interdependence. The relationship must be shown to be serious and lasting. To determine the true nature of the relationship — whether the couple bears the generic character of a family unit as a relatively permanent household — should be evaluated. Such evaluation includes those factors that make the relationship close and enduring, and requires more than a common residence, although that is an important factor. Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple’s social and family circle.

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To discuss your specific situation, please call me, Paul G. Kostro, Esq., to schedule an appointment: 908-232-6500 or Paul@Kostro.com

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