Risa A. Kleiner, Esq.

January 27, 2012

It’s a new year but an old issue.  Alimony.  A debate is raging as to whether there should be alimony guidelines in the same way there are child support guidelines.  Litigants and lawyers alike complain that judges have too much discretion when it comes to making an alimony award and that guidelines would create more uniform results.

The real issue isn’t that one alimony award is different from another.  After all, one case is different from another and the resources and needs of the parties are different, too.  But lack of predictability is fodder for unending litigation and skyrocketing legal fees and may force settlements that feel necessary, but unfair.

NJ courts are wedded to the statutory factors that allow judges to set alimony awards that seem appropriate to each family.  If the legislature creates guidelines, which factors will they use to measure whether alimony is appropriate and, if so, how much should be paid and for how long?  Length of marriage? Disparity of incomes? Child-raising responsibilities?  These are, of course, three of the factors that NJ courts currently apply.

The rhetoric employed by anti-alimony groups exaggerates the onerous effects of alimony.  No one wants to pay; but often, one spouse would be left unable to cover even their basic living expenses without some assistance.  After a long marriage, many years out of the workplace or in a lower paying job, it may never be possible to make up for lost time. 

When needs (not just wants) can be discussed in a reasonable way, parties can reach a compromise that they can live with.  This is often better accomplished in out-of-court settlements through mediation or collaborative divorce.  With the help of a neutral mediator or collaboratively trained attorneys, the alimony issue can often be resolved without costly litigation.  Equally as important, the resulting agreement feels fairer to each party because they played an active role in creating the outcome.

For more information about mediation and Collaborative Divorce, contact Risa A. Kleiner, Esq. at 609.951.2222.

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

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

March 23, 2011

In New Jersey, the parties to a divorce are not permitted to cancel or alter their life insurance while the divorce is pending.  In fact, when a Complaint for Divorce is filed, the filing party (plaintiff) must certify that no changes have been made to their health, life, auto or home insurance coverage or beneficiaries during the preceding 90 days.  If any changes were made during that time, the plaintiff must explain them.  When the defendant files a responding pleading with the court, he or she must also certify as to the status of their insurance. coverage and must notify the court if any subsequent changes are made to the coverage while the divorce is pending.  This rule was established to avoid having one spouse remove the other from their insurance coverage (life, health, automobile or home) without their knowledge.    

Life Insurance is often used as security for alimony or child support following a divorce.  If a husband is obligated to pay spousal support after the divorce, but dies pre-maturely, the former wife will be left without the funds on which she relied to pay some or all of her expenses.  Life insurance proceeds are intended to cover the shortfall.  Similarly, with child support, life insurance proceeds fill the gap to provide child support and cover one parent’s share of college and other expenses that may occur after their death. 

Often, spouses/parents have life insurance through their employment rather than private coverage.  This can create a void if there is a loss or change of employment.  Therefore, parties are often expected to obtain private life insurance policies that will remain with them regardless of any change in their employment status. 

Divorcing parties need to understand the difference between the “owner” of a policy and the “beneficiary” of the policy.  The owner of a policy usually pays the premiums and receives all important updates and information on the policy and may make changes to the coverage and the beneficiary.  In a divorce, it is a good idea to provide that the beneficiary will receive updates on any changes to the policy and will have access to policy information directly through the insurance company to confirm that premiums are up to date, no loans have been taken against the value of the policy (if it has a savings component) and that the beneficiaries have not been altered.

Life insurance may also be held in an insurance trust.  In that case, the proceeds of the policy are deposited into the Trust upon the death of the insured.  The Trustee then disburses the proceeds as the Trust document directs.  It is helpful for the parties to a divorce to review their insurance policies and to consult both their attorneys and a life insurance specialist about these issues.

For further information about Mediation and Collaborative Divorce, contact Risa A. Kleiner, Esq. at 609.951.2222 or risa@rkleinerlaw.com

August 13, 2009

In a published opinion, The Honorable Robert J. Mega, sitting in the Chancery Division, Family Part in Union County, held that New Jersey courts retain “continuing exclusive jurisdiction” to modify a spousal support order that was established in New Jersey.   The unusual issue decided in Pek v. Prots, FM-20-00286-04, arose because the parties parties had both moved out of New Jersey after the divorce.  Their Judgment of Divorce provided that Ohio should exercise all future jurisdiction of issues arising after the divorce.

Despite their agreement — and the fact that they no longer reside in New Jersey — the court found that Federal Law (specifically the Uniform Interstate Family Support Act (UIFSA), overrides their contractual selection of jurisdiction as to the issue of modification of alimony, but not child support.  UIFSA is codified in New Jersey at N.J.S.A. 2A:4-30.65 to 123. 

The issue arose after plaintiff filed a motion to modify child support and alimony in Ohio where his former wife and the children reside.  The Ohio court agreed to exercise jurisdiction over the child support issue, but not over spousal support.  The New Jersey court agreed, holding that, although forum selection clauses are generally enforceable in this State, enforcing the parties’ choice of jurisdiction over alimony could avoid potential confusion among jurisdictions which might result in a litigant having no forum whatsoever in which to litigate his claim.

Lesson to be learned:  Since a significant amount of litigation involves post-judgment issues, it is critical that parties be well-informed of the law before entering into a Settlement Agreement which is to be incorporated into their Judgment of Divorce.   

More important lesson to be learned.  If the parties had sought mediation to resolve the modification requests made by plaintiff in this case, the time and expense of duplicate litigation in NJ and Ohio could have been avoided.