How is Alimony Calculated in NJ?
You’re at the crossroads of a divorce and the same worries keep flooding your mind:
- “Can I afford to keep the house?”
- “Will I be able to pay my bills?”
- “How will I get health insurance?”
- “Will I have enough to be able to save for my retirement?”
All of these fears are typical in divorce mediation in NJ and have one thing in common:
Money.
When it comes to money and divorce, there's one topic that's more stressful, more emotional, and more difficult to resolve than any other.
Whether you call it alimony or spousal support, coming to an agreement that will require one ex-spouse to pay money to the other to support their lifestyle is challenging, to say the least.
How does alimony work in NJ?
Alimony is one of four topics that are discussed and agreed upon by the parties in mediation along with:
- Parenting Plans
- Child Support
- And Equitable Distribution (the division of your marital property, assets, and liabilities)
It’s important to understand that alimony is strictly based on need and is gender-neutral. Meaning that both women and men can be eligible to receive it.
Support is not meant to unjustly enrich one party or penalize the other. The idea is to strike a balance and allow both parties to live somewhat equally for a period of time just as they did during the marriage.
So why is alimony a thing?
Alimony is intended to aid the lower-earning spouse in making the transition from married to single.
To give them time to get back on their feet and become self-sufficient after the divorce.
But what does that really mean in practical terms?
There are a few things you need to understand about the challenges of determining alimony in NJ:
- New Jersey law is extremely vague on how to resolve this issue. The State of New Jersey provides very little in the way of guidance or formulas;
- With the cost of housing being significantly more expensive in New Jersey than elsewhere in the US, and mortgage rates at or near a 20-year high, establishing separate households will be far more challenging for divorcing couples than in previous years;
- This topic has less to do with alimony laws and more to do with money and negotiation;
- There is more than meets the eye on this issue and this topic is much too complex (and emotional) for you to try to resolve on your own.
That's why you'll get the best result by mediating with us.
"With emotions running high and very few formulas or guidelines in New Jersey to help you come to an agreement on alimony payments, things can quickly go off the tracks in your case if you involve attorneys.
That’s why it's better to work with an experienced divorce mediator like me.
I’ll take you through my proven, step-by-step process and help you negotiate and come to an agreement (out of court) on alimony that's fair to both of you."
There is no such thing as a NJ alimony calculator.
When it comes to child support, there's a mathematical formula that outputs a specific minimum amount a party should pay to support their children.
And the formula is based on a series of clearly defined inputs.
But there is no such formula for calculating alimony in NJ.
New Jersey provides some general guidelines regarding alimony, but nothing explicit to help you determine a specific alimony obligation applicable to your circumstances in your case.
The New Jersey factors may include, but are not limited to:
(1) The actual need and ability of the parties to pay;
(2) The duration of the marriage or civil union;
(3) The age, physical and emotional health of the parties;
(4) The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living, with neither party having a greater entitlement to that standard of living than the other;
(5) The earning capacities, educational levels, vocational skills, and employability of the parties;
(6) The length of absence from the job market of the party seeking maintenance payments;
(7) The parental responsibilities for the children;
(8) The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;
(9) The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;
(10) The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just, and fair;
(11) The income available to either party through investment of any assets held by that party;
(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment;
(13) The nature, amount, and length of any support paid prior to the divorce being final if any; and
(14) Any other factors which the court (or parties) may deem relevant.
Even with these factors, there is little guidance on how to resolve this topic. Not one of the “factors” listed above results in an actual dollar amount or specific alimony payment.
Leaving you and your spouse no choice but to negotiate it.
Which, given the nature of divorce itself and specifically, this heated issue, is very difficult to do.
When it comes to New Jersey alimony, don't forget about cost of living.
As if figuring out support wasn't hard enough, there's yet one more factor we need to add to the mix. And that's where you live.
Say your marital home was in Bridgewater, in Somerset County, and you're the one who will be paying alimony. But your ex decides to move to Short Hills post-divorce, to be near family.
So... do you pay alimony to them based on what it cost you both to live in Bridgewater while you were married? Or do you pay them based on what it will cost to live in Short Hills - recognizing it will be more expensive to live there?
And given the significant inflation we've seen over the past few years, how, if at all, do you account for that in your alimony agreement?
Good questions...
Determining an amount of spousal support in NJ is just one piece of a larger picture.
You also need to determine the duration.
And just like determining an amount, duration is not so easy to agree on.
In NJ, there is no set formula for determining how many years you need to be married to get alimony.
The answer once again is you will have to negotiate it.
When thinking of spousal support NJ, most people think of the "check in the mail" approach.
But there are other, more creative ways to resolve this because some payor spouses just don’t like making periodic alimony payments.
For example, sometimes people will trade alimony for assets in their case. Or do a lump sum alimony payment or an alimony buyout. Or pay to send a spouse back to school.
The bottom line is there’s no such thing as typical alimony payments.
And there are many different ways to resolve this issue.
Some of the types of Alimony in NJ include...
1. Open Durational Alimony (New Jersey)
Formerly known as permanent alimony, open durational alimony has no specific end date set at the time at which it is awarded.
Open durational alimony may be awarded in longer-term marriages of 20 years or greater where there is little if any, chance that a dependent spouse would ever be able to maintain the standard of living of the marriage.
The typical open durational support case is one where one spouse has been a full-time parent and homemaker for many years.
This parent may have past work experience and even a college or post-graduate education, but in the years that the individual has been at home, the other has built a career, a wage-earning capacity, and a standard of living that the homemaking dependent partner could not likely reach.
Another typical case for open durational support is one in which the parties have both worked outside the home, but one has a substantially greater income.
2. Limited Duration Alimony (NJ)
This is support that is to be paid for a certain period of time.
It can be appropriate in shorter-term marriages (less than 20 years) and in marriages where there is a reasonable probability that the receiving spouse will become self-sufficient to the extent of being able to maintain the standard of living of the marriage.
This type of alimony is often modifiable in amount during the term, but the term itself is usually not subject to alimony modification.
Recently, the State of New Jersey has stated that the length of alimony may not exceed the length of the marriage or civil union provided that marriage or civil union was 20 years or less in duration.
3. Rehabilitative Alimony (New Jersey)
Rehabilitative support in New Jersey is only intended to be paid for a period of time, but the duration is tied to a specific plan for the payee spouse to become financially self-sufficient.
A plan to go back to school to get a high school, college, or post-graduate degree would qualify a spouse for rehabilitative support. Vocational training, technical training, or starting a business would also be circumstances to come under this concept.
The idea is to pay support to a spouse who cannot maintain the standard of living of the marriage while he or she is preparing to become self-sufficient.
This kind of support often takes into account the costs of the education or training program and the inability of that individual to work or work full-time while going to school. It can be combined with permanent or limited duration alimony.
4. Reimbursement Alimony (NJ)
This type of alimony in New Jersey may be awarded when the circumstance is that one party supported the other through advanced education, anticipating participation in the fruits of the earning capacity generated by that education.
Reimbursement support might be appropriate where one partner worked to support the other through law, medical, or business school.
The state of NJ recognizes that both parties worked and contributed to the advanced degree and are entitled to benefit from it.
There is more than meets the eye when it comes to alimony NJ.
As you can see, alimony is not a one-size-fits-all topic and every couple’s situation, circumstances and determining factors are unique.
So coming to a fair agreement on alimony with your soon-to-be ex requires more than just a passing conversation or a wild guess. And as you’re starting to see, there’s a lot involved in this highly complex matter.
And a lot of places you can make costly mistakes.
In the majority of cases, this issue is much too complex and emotionally charged for you to attempt to determine on your own, especially if you have a long-term marriage.
When an alimony lawyer get involved, it’s a problem.
Because there's no formula or hard and fast alimony laws, if you go the divorce attorney route, your lawyers can drag your negotiations on for years.
Fighting and fighting. Around and around in circles - in a very gray area. All while billing you their outrageous hourly fees.
Until neither you nor your soon-to-be ex has any money left to keep paying your legal fees.
And there's no money left for alimony!
When a New Jersey family law judge gets involved, it’s a problem.
And if the issue cannot be resolved between the two of you and your lawyers, your case will go to litigation in court.
There’s something you need to understand here: In a litigated divorce, a judge determines who gets what on a case-by-case basis.
Sounds scary, doesn’t it?
Because they’ll dictate the terms of the settlement in court and tell you what you’re going to pay or receive.
And each of you might wind up with an alimony outcome you don’t think is fair or that doesn’t meet your needs.
That’s why it’s better to negotiate an amount and duration each spouse finds fair. And negotiation is exactly what NJ divorce mediation is all about.
In mediation, you get to decide - and come to an agreement you both agree is fair, out of court - instead of letting your future be decided by a stranger.
You’ll get the best NJ alimony result by mediating with us.
Using our extensive financial knowledge of the complex matters of alimony, we'll help you determine which of the factors apply in your situation and discuss with you both how they may impact the amount and/or duration of alimony in your New Jersey divorce.
We'll discuss which of the four types of NJ alimony (listed below) may be appropriate in your case. And explore the feasibility of using some combination of alimony types in conjunction with child support and asset division, as all three topics are inter-connected.
We’ll actively guide you through our comprehensive budgeting process to reflect your marital as well as projected post-marital expenses. So we can take a close look together at the income each of you earns, spend, and will need to move forward.
We’ll then help you negotiate an alimony agreement you both find fair and will best enable both of you to meet your financial obligations after you're divorced.
And since we offer flat-fee mediation services, we have no vested interest in prolonging the conflict because we don’t bill you hourly as a lawyer would.
Early in the process?
The choices you make before you start your divorce are critical.
But you can only make smart choices if you take the time to prepare first!
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