Applying New Jersey’s Amended Alimony Statute to Early Retirement in Settlements Entered Before Statute was Amended

In 2014, New Jersey amended its alimony statute. Among other provisions, the amendment addressed whether a party who owes alimony can choose to retire before reaching full retirement age and if they choose to do so, whether they can stop paying alimony at that time. A New Jersey court recently had occasion to determine how the amended law applies to applications for early retirement in cases involving final orders or marital settlements entered before the 2014 amendments were enacted. Read on to learn about the case and the provision at issue, and call a seasoned New Jersey alimony modification attorney if you have any questions about a New Jersey divorce.

The 2014 retirement modification

Under the previous version of New Jersey’s alimony statute, any party seeking to modify an alimony arrangement would need to demonstrate that changed circumstances have substantially impaired the ability to support oneself. The provision did not explicitly address early retirement.

In 2014, the legislature added a subsection specifically concerning the “prospective or actual retirement of the obligor.” N.J.S.A. 2A:34-23(j)(2) under the amended law governs the review of alimony awards where the obligor retires before reaching the full retirement age. Alimony may be reduced or terminated so long as the obligor demonstrates “by a preponderance of the evidence that the prospective or actual retirement is reasonable and made in good faith.”

Subsection (j)(3) sets certain requirements for retirement applications that concern alimony orders or settlements that were established before the effective date of the modifications. Unlike (j)(2), (j)(3) requires the judge to “consider the ability of the obligee to have saved adequately for retirement,” an additional burden for the alimony payor to confront.

Prior to the instant case, it was unclear whether subsection (j)(2) would apply in cases involving early retirement and divorces that occurred before the amendment, or whether subsection (j)(3) would apply to all retirement applications, whether or not the retiree had reached full retirement age.

Court applies amended law to alimony case

The parties in Amzler v. Amzler entered a marital settlement agreement (MSA) upon their divorce in 2009, under which the plaintiff owed alimony to the defendant. The MSA included a so-called “anti-Lepis” provision, which stated that “voluntary reduction in income of either party” would not constitute a substantial change in circumstances for the purpose of modifying the alimony obligation. The plaintiff retired before reaching full retirement age due to medical issues and sought to terminate his alimony obligation.

The trial court granted the motion to terminate alimony, relying on N.J.S.A. 2A:34-23(j)(2) and finding that the retirement was entered in good faith. The Appellate Division overturned the decision. The appeals court found that the trial court had inappropriately used the standard laid out under subsection (j)(2), rather than subsection (j)(3), and the structure and language of the statute demonstrated that subsection (j)(3) should apply to all retirement applications that concern alimony orders or agreements entered into before the statute was amended. The court, therefore, failed to consider the ability of the party receiving alimony to have saved adequately for her retirement, a factor present in (j)(3) but not (j)(2).

The trial court, moreover, failed to even ask whether early retirement may have triggered the anti-Lepis provision concerning voluntary reduction of income. For these reasons, the Appellate Division reversed the trial court’s decision and remanded for proper evaluation of the retirement application under N.J.S.A. 2A:34-23(j)(3) as well as whether the anti-Lepis provision prohibited a termination or reduction of plaintiff’s alimony obligation.

Help With Your New Jersey Alimony Issues

If you are dealing with alimony or other family law issues in New Jersey, speak with a passionate and effective alimony modification and family law attorney at the Union offices of family law attorney John B. D’Alessandro. Call us today at 908-964-0102.