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Does Alimony Stop On Retirement? As Usual in the Law, It Depends.

spouse.jpgA recent New Jersey Appellate Court case, Landers v. Landers, is the first "published" decision to explain how to properly apply the September 2014 changes to New Jersey's alimony laws. The change that the Landers case ruled on was about alimony payments when the spouse with the alimony obligation (the "Obligor") retires. Before the 2014 changes, the Obligor had to show the court "changed circumstances" when applying for a modification or termination of alimony. After the 2014 changes, an Obligor who has attained his or her full retirement age (i.e. age when you can get full Social Security benefits) became entitled to a "presumption" in favor of termination of support - the spouse receiving alimony (the "Obligee") would have to rebut that and explain to the court why the payments should continue.

In the Landers case, a couple ended their 22-year marriage in 1991. One of the terms of the divorce ordered the husband to pay alimony to the wife, which he did. But after his 66th birthday, he applied to the Court to terminate his alimony obligation, claiming that his ex-wife was still working and collecting social security retirement benefits as his former spouse, while he had retired and his post-retirement income only consisted of social security retirement benefits and the pension he received in the divorce. The wife wanted the alimony to continue and for the ex-husband to maintain a life insurance policy that would insure his life for her benefit. The trial court concluded that the husband was entitled to the post-2014 "presumption" and terminated the husband's alimony obligation. The wife appealed.

The Appellate Court noted that the new law created a difference between pre- and post-change alimony orders. For requests to change alimony orders made after September 2014, the Obligor is entitled to the presumption and the Obligee must demonstrate to the court why alimony should continue when the Obligor has reached full retirement age.

On the other hand, requests to modify alimony orders entered before September 2014 follow the prior principles outlined in a New Jersey Supreme Court case, Lepis v. Lepis, which states that "the court shall consider the ability of the obligee to have saved adequately for retirement ... in order to decide whether the Obligor ... has [shown] that a [change] or termination of alimony is appropriate." This means that alimony orders entered into before September 2014 put greater importance on the ability of the spouse receiving support to have properly saved for retirement.

The Appellate Court concluded that it could not ignore that the husband sought an application to modify an alimony order entered before the September 2014 effective date of the new alimony law. Since the alimony order was entered before September 2014, the trial court was found to be incorrect in concluding that the husband was entitled to the "presumption." So the Appellate Court reversed the trial court's decision and sent it back so that lower court could look at whether the ex-wife saved for retirement. So the Landers divorce battle goes on, 25 years later. Kieu-Nhi Le, Rutgers School of Law Newark candidate for a JD degree in May 2016. She is the Managing Business Editor of the Rutgers Computer and Technology Law Journal collaborated with me on this blog.

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