In prior blogs, we wrote about generally modifying support obligations and specifically about the legal standards and general questions surrounding modifying alimony based on the recipient’s cohabitation with another adult in a relationship that is tantamount to marriage, or when retirement occurs. In today’s economy and job culture, people change jobs frequently. Employers cut jobs, rearrange compensation structures or, in the worst scenario, go out of business. In happier scenarios, while one former spouse is paying alimony and the other is receiving it, the recipient might experience an improvement in financial circumstances, like a promotion or new job, or success in self-employment.
When it seems like fortunes have shifted, and the alimony recipient no longer has the same financial need, the payor has the legal right to seek a reduction or termination of alimony. The following steps may help clarify whether the effort is worthwhile:
- Check the agreement or support order. Many people anticipate changes in financial circumstances and try to plan ahead. Although New Jersey Courts cannot order automatic recalculations of alimony over time (unless parties agree to it), everyone who is getting divorced has the right to customize their settlement terms. A divorce settlement agreement or consent order might include conditions for modification, requirements for the exchange of financial information, or formulas for modification.
- Flashback to the “marital lifestyle.” Most recent divorce documents include a representation of the “marital lifestyle” and each person’s ability to fund a similar lifestyle. Also, since 2000, almost everyone getting divorced in New Jersey has sworn under oath at the final uncontested hearing that they could, or could not, maintain the marital lifestyle going forward. These statements impact whether a baseline exists for modifying alimony. If the recipient could maintain their lifestyle with the alimony, the payor may have a path for modifying alimony based on improvement in their ability to support themselves.
- Find old financial records. When modifying alimony, the pivotal questions include how each party’s financial circumstances have changed. The best way to prove and quantify the changes will be to produce proof of income, assets and cash flow at the time when the alimony obligation started. If litigation starts, the Rules of Court require production of the Family Part Case Information Statements from that time period, or at least from during the divorce.
- Look at both sides. An improvement in the recipient’s ability to support themselves will not be the only consideration, especially if the alimony payments were not originally sufficient to enable the recipient to maintain the marital lifestyle. Increases in the payor’s income or improvements in their ability to pay also come into play.
Generally, New Jersey law likes an analysis which examines the balancing of multiple factors. If you have questions about modifying your alimony obligations, or concern that you might encounter a reduction of the alimony that you receive, contact the family law team at Cohn Lifland.