Calculating Alimony in a New Jersey Uncontested Divorce
Parties that wish to agree upon terms for a NJ divorce, if there is a large disparity or difference in income, will have to determine what, if any, alimony will be paid and how much will be paid by one party to the other.
Generally, there are two types of ways of determining the amount of alimony to be paid that are used by the Courts and matrimonial attorneys:
• Rule of thumb – one third the difference of the income of the parties.
• Statutory Factors and Needs analysis – based on N.J.S.A. 2A:34-23 (2014) and previously based on a Crews v. Crews (2000) analysis of the standard of living during the marriage.
The one-third the difference of income rule has been informally used in the New Jersey Family Law Courts in this manner, by way of example, if the Husband has gross income of $100,000 per year and the Wife has gross income of $25,000 per year, then the alimony that would be paid based on this informal rule would be $25,000 per year.
The needs analysis is much more complicated and relies on a review of a number of factors that have now been codified in the New Jersey alimony statute, N.J.S.A. 2A:34-23, that had previously been elucidated in New Jersey case law, such as Crews v. Crews, dealing primarily with the standard of living during the marriage, the statutory factors are as follows:
• (1) The actual need and ability of the parties to pay;
• (2) The duration of the marriage or civil union;
• (3) The age, physical and emotional health of the parties;
• (4) The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living, with neither party having a greater entitlement to that standard of living than the other;
• (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 non-financial contributions to the marriage or civil union 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 payouts 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;
• (13) The nature, amount, and length of pendente lite support paid, if any; and
• (14) Any other factors which the court may deem relevant. In each case where the court is asked to make an award of alimony, the court shall consider and assess evidence with respect to all relevant statutory factors.
The standard of living during the marriage has now been statutorily addressed further beyond existing case law, in that it is recognized that neither party, the payor or the payee of alimony, have a greater entitlement to the marital standard of living. The law and the Courts have now evolved in that there is much greater recognition that it is unlikely that the parties will be able to maintain the marital lifestyle or standard of living after divorce, as realistically, the parties will now have to maintain two households instead of just one.
Generally, for a needs analysis and analysis of the parties’ standard of living, the parties’ Case Information Statements, which show their personal expenses in Schedule C are reviewed to determine what the needs of the parties are upon separation v. what they were when the parties lived together.
This kind of analysis can be very complicated in that the parties may have lived a frugal lifestyle, or were living above their means, or there could be a cash component to income not reflected in their Case Information Statements. These issues can also affect the determination of alimony based on the one-third the difference rule as well.
So, as you can see, determining the amount of alimony to be paid from one party to the other can often be a very discretionary issue and can be the number one reason parties litigate the issue of alimony and have a hard time agreeing upon the amount of alimony to be paid.
Other issues that will likely have to be tackled as to determining the amount of alimony include:
Imputation of income of an unemployed party;
Temporary or Permanent Disability of one party or the other;
Unreported income by one party or the other;
The term of alimony being considered;
The amount of child support to be paid;
Alimony paid to be taxable income or non-taxable income;
Continued payment of a mortgage or other expenses by the Payor of alimony;
Intentional underemployment by one party or the other;
Inheritance or Trusts;
Retirement accounts or pensions.
Parties seeking an uncontested divorce upon the filing of their complaint for divorce will have to consider this issue very thoughtfully or it will likely lead to continued litigation. At Green & Associates, with years of experience in litigating this issue, our NJ divorce lawyer and NJ divorce attorney can help you with this very difficult issue. Call us now at 732-390-0480 or 201-242-1119 for a free consultation in our East Brunswick divorce or Fort Lee divorce offices. Nights and weekend appointments are available.
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