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Payback & Alimony – getting reimbursed for your investment in your spouse’s education and earning capacity.

On behalf of Cohn Lifland Pearlman Herrmann & Knopf LLP | Dec 12, 2019 |

Usually, marriage is a shared enterprise and a joint undertaking, but what happens when this enterprise goes awry? If one spouse put the other through higher education, what does she or he get in return for those contributions, when the parties divorce? While not the ideal remedy in every case, reimbursement alimony may be an available means to reimburse a supporting spouse.

In New Jersey, when couples divorce, we divide all of the property that is acquired during the marriage. While the New Jersey Supreme Court has interpreted the word “property” broadly in the context of equitable distribution, we do not include professional degrees or educational expenses under the category of property. However, that does not mean that a supporting spouse is left without a remedy in the event of a divorce. We strive to avoid the inequity that would result if we ignored allow the financial contributions of a sacrificing spouse. That inequity would arise if the “supported spouse” were to retain the degree and/or training, and the subsequent fruits derived therefrom, while the “supporting spouse” was left empty handed. 

Confronted with this potential unfairness, and consistent with N.J.S.A. 2A:34-23(e), the New Jersey Supreme Court allows for reimbursement alimony in divorce proceedings. Reimbursement alimony “provide[s] a fair and effective means of compensating a supporting spouse who has suffered a loss or . . . has been deprived of a better standard of living in the future.” It is meant to “cover all financial contributions towards the former spouse’s education, including household expenses, educational costs, school travel expenses and any other contributions used by the supported spouse in obtaining his or her degree or license.”

Like other types of alimony, reimbursement alimony should be determined on a case by case basis, that is, “tailored to individual circumstances, particularly those relating to the financial status of the parties.” Generally, when determining the reimbursement alimony award, courts are instructed to consider the “actual need, ability to pay and duration of the marriage,” regardless of whether it is a fault or no-fault divorce. Additionally, in all cases, “the financial contributions of the parties during the marriage can be relevant” to the alimony award determination.

This does not mean, however, that “every spouse who contributes toward his or her partner’s education or professional training is entitled to reimbursement alimony.” A reimbursement alimony award is premised on spousal expectations and the circumstances of the parties. Thus, “[o]nly monetary contributions made with the mutual and shared expectation that both parties to the marriage will derive increased income and material benefits” will be reimbursed. Again, like traditional alimony and equitable distribution, the specific award to be granted will turn on the facts of each particular case. Reimbursement alimony is not the proverbial one size fits all. It may be inappropriate where, for example, the supporting spouse is economically self-sufficient or where division of substantial assets are involved. In those instances, other relief, such as equitable distribution or permanent alimony, may be better suited to serve the parties’ interests.

Ultimately, in appropriate circumstances, a spouse who makes financial contributions to her spouse which are then used by him to obtain a degree or training and she does so with the expectation that both will reap a benefit from this degree or training in the future, may be reimbursed for such financial support in the event of divorce. After all, a spouse that was supported during school and/or training should expect that, upon divorce, the spouse who supported him will seek reimbursement for the contributions and sacrifices that she made in favor of his degree and/or training. “Marriage should not be a free ticket to professional education and training without subsequent obligations,” according to the New Jersey Supreme Court.

If you or your spouse attended school during your marriage, or got a professional degree of any kind, the costs and joint planning might be relevant to a claim for reimbursement alimony. The experienced family law attorneys at Cohn Lifland Pearlman Herrmann & Knopf, LLP can help you understand your rights and obligations. Call us for more information.