Alimony and Retirement

By Peter Van Aulen, Esq.

The case Lepis v. Lepis, 83 N.J. 139, (1980) held that alimony awards can be modified upon showing a “changed circumstance”. The party seeking to modify the alimony obligation has the burden of demonstrating the “changed circumstance” and if said “changed circumstance” justifies the relief requested. Id at 157-59. If the moving party makes a showing of a changed circumstance, the Court may order discovery and hold a hearing to determine the party’s ability to pay. Retirement by the paying spouse could be a legitimate “change of circumstance” depending on the surrounding facts.

A significant case in reference to early retirement while paying alimony is Dilger v. Dilger, 242 N.J. Super 380 (Ch.Div. 1990). The parties in Dilger were divorced after 30 years of marriage. The husband agreed in the Property Settlement Agreement to pay the wife $1,000.00 a month in alimony. The husband six and half years after the divorce voluntarily retired and stopped making alimony payments. The wife filed a Motion to enforce her alimony payments and the husband crossed moved to terminate his alimony obligation. The husband was 62 and the wife was 64. The husband did not have any significant health issues causing him to retire. The parties’ Property Settlement Agreement was silent on the issue of retirement by the husband. Also, the Court in Dilger held that a Court, in considering whether retirement constitutes a changed circumstance, is not only to determine if the retirement was in good faith, but in light of all the circumstances, if it was reasonable for the spouse who is paying alimony to have elected early retirement. The Court in Dilger stated a Judge shall consider the following factors in determining whether the early retirement was reasonable:

• The health and age of the party wanting to retire.
• The motives of the party wanting to retire.
• The timing of the retirement.
• The party who is paying alimony the ability to pay the same even after retirement.
• The ability of the party who is receiving alimony to provide for themselves.
• The reasonable expectations of the parties at the time they entered into the Property Settlement Agreement on whether the paying spouse was planning retirement at a certain age and the opportunity given to the spouse receiving alimony to prepare to live on reduced support.

The Court in Dilger, considering the paying spouse’s age and good health, reasons for wanting to retire, and the lack of notice of retirement given to the dependant spouse so she could economically prepare for the loss of alimony income, held his decision to retire was not made in good faith and under the circumstances was unreasonable. Consequently, the Court in the case Deegan v. Deegan, 254 N.J. Super 350 (App. Div. 1992) seems to have added an additional requirement by holding that even if the retiring party demonstrated that he or she has acted in good faith and has shown rational reasons for their retirement a Judge must decide if the advantage to the party who is retiring outweighs the disadvantage to the party who is receiving alimony. Also, it is important to note that Courts consider other facts besides a party’s income in deciding whether to modify their alimony obligation, such as real and personal assets.

Alimony retirement cases can be complex. If you are thinking of retirement or if you are receiving alimony, and if alimony is subject to modification due to your former spouse’s retirement, call me today at 201-845-7400 for a consultation.