Month July

  • Alimony Redux – Should there be Guidelines?

    July 18, 2011

    New York recently became one of the few states to adopt a formula for pendente lite alimony awards.  That is, for alimony to be paid while the divorce is pending in court.  According to a recent New York Times article entitled “Ending the Alimony Guessing Game”, the IRS confirms that former spouses pay about $9 billion each year in alimony.  As anyone who has appeared in family court knows, the awards vary dramatically from county to county and judge to judge.  Should NJ adopt alimony guidelines to make the awards more uniform?

    As stated in a prior blog, NJ courts apply a list of factors  to determine what, if any, alimony the higher earning spouse should pay.  How those factors are applied depends on who is doing the calculation.  The above-mentioned NY Times article noted that awards are so vastly different that, when asked how much alimony a lifelong homemaker married to a doctor deserved, judges in an Ohio survey estimated as little as $5,000 per year and as much as $175,000. 

    The unpredictability of alimony awards makes negotiation difficult.  The NY Times writer asserts that New York’s law minimizes the cost of litigation by establishing a mathematical formula to calculate temporary alimony.  The formula may be adjusted by each individual judge under special circumstances.  The formula subtracts 20% of the lower-earning spouse’s income from 30% of the higher earning spouse’s income — so long as the lower earner doesn’t wind up with more than 40% of the combined income.  Under this formula, if the incomes were $150,000 and $50,000, the alimony award would be $35,000 — leaving the gross incomes at $115,000 and $85,000 respectively.  Note that taxes are not considered in this calculation.

    The ease of this calculation is attractive and would certainly make mediators’ work easier.  The NY Guidelines are intended only for temporary alimony.  But, “temporary” often morphs into “permanent” just by default.  So, the question is whether simplifying the alimony calculation would overlook the many issues:  health, age, length of marriage, earning capacity, for example, that judges in NJ are required to consider.  And “Guidelines” often become rules which judges are reluctant to deviate from and which parties adhere to with strict allegiance. 

    In mediation and Collaborative divorce, the parties can adjust the alimony award, if any, to their individual needs.  And, in the end, this should be the goal — allowing both parties to move forward in their lives.

    For more information about divorce issues, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

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  • Alimony: How is it Calculated in NJ?

    July 8, 2011

    New Jersey has an alimony statute that lists 12 factors for the court to consider in awarding alimony in a divorce.  In addition, NJ case law requires that the court consider the marital lifestyle, the dependent spouse’s ability to contribute to his or her own support and the ability of the supporting spouse to pay any shortfall.  Unlike in some other states, there is no formula or guidelines for alimony in NJ, as there is with child support.  The statutory factors can be reviewed at N.J.S.A.2A:34-23(b).

    There are four types of alimony in NJ.  First, the court must consider whether Permanent Alimony is warranted.  This usually occurs if the marriage is 15 years or longer and if there is a significant disparity in the parties’ incomes.  But other factors, including the age and health of the parties, the marital standard of living and parental responsibilities for children, also are taken into consideration. 

    A second type of alimony is Limited Duration Alimony.  LDA, as it is called, is for a specified period of type and is usually awarded in shorter marriages where permanent alimony is not warranted.

    A third type of alimony is Rehabilitative alimony.  This support is awarded to assist a dependent spouse who has a specific plan for improving or increasing their educational or job skills.  It is usually for a few years and may be in addition to other forms of alimony. 

    Fourth, there is Reimbursement alimony.  Awarded less often, this type of alimony is intended to compensate a spouse who supported the other party while they were in school or receiving advanced training. 

    In a litigated case where alimony is an issue, the parties will testify as to their marital lifestyle and provide documentation to prove income and expenses.  The court will attempt to provide a “reasonably comparable” standard of living for each party after the divorce, although this may not be possible where two households must be supported on the income that previously supported only one.  In mediated or collaborative cases, the parties, with assistance from counsel, try to work out a fair amount of support so that both parents can provide nearly equivalent lifestyles for their children after the divorce.

    Although it may feel unfair to some parties that, despite their divorce, they still have to contribute to the income of the other spouse, the State views this as an ongoing obligation.  In fact, it is a way to avoid having a divorced spouse become a public charge because they are left with insufficient funds on which to live.

    For more information on alimony and other divorce issues, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

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