Edward R. Weinstein, Esq.

New Jersey Alimony and Retirement; A New Case Provides Guidance

In September 2014, New Jersey’s alimony laws became “modernized” in many respects. Consequently, lawyers who only handle divorce and family law cases have been monitoring how the courts interpret many aspects of the New Jersey’s modified alimony laws. To wit, in the past, an attorney would have to advise their client that it may be best to wait until they actually retire before filing a application to terminate or lessen the amount of alimony. Sadly, this would often become a “no-win” situation, as the retired person had to keep paying the alimony until a New Jersey family court judge would relieve them of this obligation. However, Judge Jones recently decided that the “new” alimony law allows for a court to order termination (or modification) based upon probable retirement instead of waiting until the individual has already retired. Following please find a detailed analysis of how the issue of retirement and alimony have become much more fair.

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In Mueller v. Mueller, the Honorable Judge Jones of the Superior Court of New Jersey, Family Part of Ocean County explored what exactly “prospective” means in New Jersey’s recently amended alimony statute, N.J.S.A. 2A-34-23(j)(1-3), in terms of terminating or modifying an alimony obligation on the basis of retirement. Judge Jones held that N.J.S.A. 2A-34-23(j)(1-3), the amended alimony statute, does not state a specific maximum or minimum period of time for getting a ruling in advance on a prospective future retirement. That said, the intent of the statutory amendment is for the prospective retirement to happen reasonably close to the when the motion is filed, not several years later.

In Mueller, Gordon Mueller filed a motion to terminate his alimony obligation five years before the date of his anticipated retirement. This time period was too far in advance for the Family Part to do a reasonable analysis of the motion. For a court to properly consider a termination or modification motion predicated on a prospective retirement instead of an actual retirement, the Family Part needs to review information current to the time period of the prospective retirement itself, to properly analyze the several factors enumerated in the amended statute. This means that to succeed on a motion for a prospective termination or modification of alimony based reaching a specific retirement age, the moving party must first reach that specific age, and also actually retire at that age. If the moving party does not retire upon reaching the retirement age enumerated in New Jersey Statute 2A:34-23(j)(1-3), then the retirement age provisions that trigger a termination or modification no longer apply until the party actually retires, or files a motion alleging a retirement in the near future. Judge Jones found that a Family Part court is allowed to order a prospective termination or modification of alimony based on a prospective retirement when: (1) the prospective retirement will happen in the near future, not many years in the future; and (2) the moving party submits a detailed and specific plan for a specific retirement. Such a detailed plain would include, not only a specific date of retirement, but also details of the moving party’s plan for financial self-support for after retirement.

Gordon and Rosemary Mueller got married in 1986 and divorced twenty years later in 2006. A matrimonial settlement agreement was incorporated into their final judgment of divorce. According to the settlement agreement, Gordon would pay Rosemary $ 300 a week in alimony. In anticipation of retirement, Gordon filed a motion under the newly amended alimony statute, New Jersey Statute 2A:34-23(j). He alleged that he was fifty-seven years old, and that he planned to retire in five years’ time when he turns sixty-two, and has the right to retire and receive his full employment pension benefits. He sought a court order that prospectively held that his alimony obligation would terminate upon him retiring in five years. Gordon argued that if his alimony does not end upon him reaching sixty-two, he would not be able to financially afford to retire. In response, Rosemary cross-moved for an alimony to deny Gordon’s motion for a prospective termination of alimony.

Judge Jones explained that the New Jersey Legislature amended this state’s alimony statute on September 10, 2014. These amendments included statutory standards to consider modification or termination of an alimony obligation to be based on prospective or actual retirement. According to section (j)(3) of N.J.S.A. 2A:34-23, when there is already a final order or written settlement agreement entered before the effective date of September 10, 2014, then the “reaching full retirement age” defined in the statute will constitute a good faith retirement age. “Full retirement age” is defined as the age the person is eligible to get full retirement benefits as per section 215 of 42 U.S.C § 416, the federal Social Security Act.

Upon reaching full retirement age, the Family Part can weigh this factor against other factors enumerated in the statute to determine if an alimony obligation should be modified, terminated, or left the way it is. In coming to a determination, the Family Part must consider numerous factors, in an effort to determine by a preponderance of the evidence, if the spouse paying alimony has shown that a termination or modification of alimony is warranted. These factors include: the paying party’s ability to have saved for retirement; the health and age of both the parties when the motion is filed; the moving party’s field of employment, and the normal age of retirement for that field; the age when the moving party becomes eligible for retirement at their place of employment, the moving party’s motive and intent in retiring, both parties reasonable expectations about retirement during the marriage and at the time of divorce; the moving party’s ability to keep up with support payments after retirement, including if he or she will still be working part-time or working reduced hours; the level of financial independence of the spouse receiving alimony, and what impact of the retirement on that level; and any other factors that affect both party’s financial positions.

New Jersey Statute 2A:32-23(j) also authorizes a court to consider a motion to terminate or modify alimony based on prospective retirement. This is to avoid a situation where the spouse paying alimony is placed in a “Catch 22” situation, where he or she is considering retiring in the near future, there can be a logical benefit from knowing beforehand, if the alimony obligation will terminate or change after retirement. Otherwise, if the paying spouse retires, and ends a stream of income, before knowing if the alimony obligation will change, then that party will be in a tenuous financial situation if the obligation does not end. As such, when a paying spouse approaches retirement age, and filed a motion to prospectively terminate or modify the alimony obligation, a Family Part court can consider the merits of the application.

The amendments to the alimony statute do not specifically address or establish, time periods for filing a motion in advance of a prospective retirement. In Mueller, Gordon filed such a motion five years in advance of his prospective retirement. Judge Jones found that a Family Part court is allowed to order a prospective termination or modification of alimony based on a prospective retirement when: (1) the prospective retirement will happen in the near future, not many years in the future; and (2) the moving party submits a detailed and specific plan for a specific retirement. Such a detailed plain would include, not only a specific date of retirement, but also details of the moving party’s plan for financial self-support for after retirement.

Judge Jones held that filing a motion to prospectively terminate alimony five years in advance was too far in advance for the Family Part to reasonably consider and analyze. The court would have to speculate, compared to a motion filed near to the retirement date that would allow for a more thorough consideration of the financial and other relevant factors. Judge Jones stated that a more appropriate time to file such a motion would be about twelve to eighteen months before the prospective retirement. With this time period, the spouse paying alimony would still have the benefit of an order in advance, before actually retiring. Therefore, Judge Jones of the Family Part of Ocean County, denied Gordon’s motion.

If you or a loved one faces an issue regarding alimony and retirement, please contact our law firm today to learn how we may help you.