On Sept. 10, Gov. Chris Christie signed a bill into law that has made significant changes to how alimony is awarded in New Jersey. The amendment follows a growing trend across the country to modify alimony laws to reflect changes in how families and marriages divide roles. Although the amendment made considerable changes to the prior law, of most importance is the removal of permanent alimony as an option for courts and the modifications to the requirements for decreasing or terminating alimony upon retirement, job loss, or when a former spouse cohabitates with another adult.
The amendment went into effect immediately for any future alimony awards; however, if you currently have an alimony order in place, the new amendments will generally have little or no impact on you.
The changes to the duration of alimony awards represent a compromise between the alimony reform movement and the need for flexibility in determining alimony awards. The amendment eliminates the term “permanent alimony” replacing it with “open durational alimony,” which now can only be utilized in marriages lasting 20 years, unless there are exceptional circumstances.
This particular modification appears to present an opportunity to limit the duration of alimony awards for long-term marriages, but is likely to lead to litigation over the meaning of open duration and whether exceptional circumstances should apply. We are already experiencing an increase in litigation over this particular modification, as clients are now trying to assert that exceptional circumstances exist to increase or decrease the duration in alimony. Until this portion of the statute has been tested in courts, lawyers and their clients are left to interpret whether their case falls under any of the exceptions.
On the other hand, the changes to the duration of alimony with regard to retirement may be helpful in decreasing litigation costs. Unlike prior case law, the statute includes a presumption that the payer’s obligation to pay alimony will terminate upon reaching retirement age as defined under the Social Security Act as age 67 if the payer was born after 1959.
This provision lifts a significant burden that previously required costly motions and hearings. I anticipate that this portion of the amendment will be the most useful in limiting alimony awards, especially in marriages lasting longer than 20 years. However, we do anticipate a conflict between the term “open durational alimony” that can be of indeterminate length and the presumption of termination upon retirement especially where exceptional circumstances exist. This conflict will be present when the paying spouse is much older than his or her supported spouse and there was a long-term marriage.
The inclusion of a standard for terminating alimony when the supported spouse begins cohabitating clarifies a process that was previously overlitigated and a source for confrontational post-divorce litigation. Unfortunately, the standard enumerated does not remove the necessity of a fact-sensitive analysis to determine whether the supported spouse is in fact “cohabitating” (a term that does not necessarily require the payee to live with another individual). General factors such as “intertwined finances” and “sharing of household chores” are open to interpretation and may still require expensive litigation.
The statute also includes standards for modifying or terminating alimony upon unemployment. The amendment breaks down the standard for those who are self-employed and not self-employed. Most significantly, for self-employed individuals, the amendment requires production of documentation evidencing the economic and noneconomic benefits received from the business.
We expect this provision to cause considerable problems for self-employed individuals, who for tax purposes, may be tentative about producing documentation of perquisites received through the business. This may cause self-employed individuals to seek a settlement of support modifications if they suffer a loss and may also increase the need for experts to review the financial information provided.
All of the foregoing modifications remain untested, and it is clear that courts will struggle to interpret and define the new standards for years to come. While the legislative efforts should be applauded, we question whether the reform fell short in some areas and will have the unintended consequence of fostering more litigation rather than less. The extent to which the new law will affect future alimony awards is unknown, but it will certainly require skilled counsel to assist clients in understanding the changes and how they might be applicable to their particular case.