Does an Alimony Judgement on Retirement Income Continue After Death

Alimony is intended to maintain the economic status quo for the dependent spouse that was experienced during the marriage.  However, it is well-established in New Jersey that this support obligation is always subject to modification or termination, including upon retirement.

New Jersey's alimony statute, N.J.S.A. 2A:34-23, amended in September 2014, addresses the effect of retirement on alimony obligations in subsection (j).  For alimony orders and agreements established prior to the September 2014 amendments, as the case discussed below, a retiring spouse can make a case for modification or termination of alimony under a change of circumstances analysis.  This analysis requires a court to consider whether the obligee has saved adequately for retirement and the following factors:

1. The age and health of the parties at the time of the application;

2. The obligor's field of employment and the generally accepted age of retirement for those in that field;

3. The age when the obligor becomes eligible for retirement at the obligor's place of employment, including mandatory retirement dates or the dates upon which continued employment would no longer increase retirement benefits;

4. The obligor's motives in retiring, including any pressures to retire applied by the obligor's employer or incentive plans offered by the obligor's employer;

5. The reasonable expectations of the parties regarding retirement during the marriage or civil union and at the time of the divorce or dissolution;

6. The ability of the obligor to maintain support payments following retirement, including whether the obligor will continue to be employed part-time or work reduced hours;

7. The obligee's level of financial independence and the financial impact of the obligor's retirement upon the obligee; and

8. Any other relevant factors affecting the parties' respective financial positions.

The Appellate Division recently decided an unpublished case, Eddey v. Eddey, which addressed this very issue.  The parties in Eddey divorced in 2003 after 26 years of marriage.  A property settlement agreement (PSA) was incorporated into their judgment of divorce.

The PSA required the ex-husband (Plaintiff), a doctor, to pay his ex-wife (Defendant), a teacher, permanent alimony of $40,000 per year.  The PSA did not address any modification or termination of alimony upon retirement.

In January 2017, Plaintiff retired as a teacher, and the same year Defendant informed her that he planned to retire at the end of the year.  In an attempt to avoid court intervention, the parties exchanged financial information in December 2017.  However, they could not come to an agreement regarding alimony.

In May 2018, Plaintiff filed a motion to terminate his alimony obligation.  He argued that he had reached the good faith retirement age, was eligible for social security benefits, and met the factors under N.J.S.A. 2A:34-23(j)(3).  Defendant opposed the motion, contending Plaintiff did not provide adequate financial information to warrant termination of alimony.

The judge, agreeing with Defendant, denied Plaintiff's motion because he did not provide sufficient financial information including a current case information statement.  Plaintiff re-filed his motion in September 2018 and supplied a case information statement and documents related to social security benefits.  This time, Defendant argued that Plaintiff failed to disclose all his income sources beyond social security.

In December 2018, the judge granted Plaintiff's motion after weighing the factors under N.J.S.A. 2A:34-23(j)(3), as set forth above.  Specifically, the judge found that Defendant's expectation that Plaintiff would continue working was unreasonable and that Plaintiff's motivation to retire was in good faith.

Plaintiff's social security income was $2,545 per month upon retirement, which the judge found inadequate to cover continued alimony payments.  The judge found that Plaintiff could not maintain his lifestyle without depleting his retirement assets, and that Defendant had sufficient assets (roughly $1.2 million) to support herself and sustain her lifestyle through retirement.

Regarding Defendant's ability to adequately save for retirement, the judge noted that Plaintiff had already paid her almost $700,000 in non-taxable alimony payments over 17 years, and that she continued working after the divorce until 2017.

Defendant appealed and argued primarily that Plaintiff did not establish a change in circumstances warranting termination of alimony and that a plenary hearing was necessary.

The Appellate Division affirmed, finding that the judge properly weighed each of the factors.  Notably, the Appellate Division stated that the "ability of the obligee to have saved adequately for retirement" is set apart from the other factors because it is a "primary factor in the analysis."   The Appellate Division found that Defendant had a "clear ability to make appropriate retirement arrangements."

If you have any questions regarding modification or termination of alimony, please contact the skilled matrimonial attorneys at Snyder Sarno D'Aniello Maceri & da Costa LLC.  Call us today at (973) 274-5200.

Citation: Eddey v. Eddey, 2020 N.J. Super. Unpub. LEXIS 783 (App. Div. 2020).

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Source: https://www.snydersarno.com/blog/2020/05/18/terminating-alimony-upon-retirement-what-205267

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