Warning Signs that You May Pay More in Alimony in NJ

Worried about whether you’re at risk of higher alimony payments in NJ? Our divorce lawyers discuss the warning signs that often lead to bigger alimony requirements.

Have you been wondering whether your divorce is likely to come with a substantial alimony bill? There are specific times in an individual’s life where there is a heightened risk that they may be ordered to pay long-term and sizable alimony. This typically occurs when an individual is going through a divorce in their late 40s to early 50s and it’s impacted by a variety of factors including the length of the marriage, the earning potential of each spouse, and the age and health of each party. As each spouse ages, their earning potential is often at its height, with high earners often making substantially more than they did in the past and the lower earner having a lower likelihood of changing careers or substantially increasing their earning capacity than earlier in their life. This creates a situation of high need that is less likely than in other seasons of life to change.

The warning signs for larger alimony requirements are not based on an exact equation, nor is this an inevitability, but rather it describes a common situation that many couples nearing retirement face when one spouse earns substantially more than the other. It’s common that one spouse may have been a stay at home parent or in and out of the workforce, earning substantially less and having acquired fewer skills or experience in the marketplace. Whereas an individual divorcing in their 20s or 30s still realistically has plenty of time to get back into the workforce or even go back to school and enter a new field, as retirement age approaches, these possibilities are less likely or dependable for individuals divorcing later in life. Understanding the nuances of this higher-stakes alimony situation and the challenges presented by this unique scenario is critical for anyone going through a divorce later in life when they have been the breadwinner.

Factors that Create Larger Alimony Obligations in New Jersey Divorce Cases

If you are going through a divorce in New Jersey and are concerned about paying or receiving alimony, you should know that New Jersey courts consider a variety of factors when making a determination about alimony. Many of these factors are particularly relevant for those entering the large-scale alimony arena. Depending on your circumstances, the outcome of the court’s analysis can be easier to predict during this dangerous phase than in other seasons of life where the variables are more likely to change.

Age and Health

The age and health of each party are some of the primary considerations in making an alimony determination. If the receiving spouse is at an age or condition that would prevent them from reentering the workforce, then they may petition for long-term or open-durational support.

Earning Potential

On the other hand, if the higher earning spouse is approaching retirement and likely to earn less, then they may argue for limited alimony. It is important to note that just because the historically higher earning spouse is about to retire does not mean that an alimony order will be limited or temporary. There are individuals who bring in just as much income or even more in retirement as they did during their working years. It all depends on the specific circumstances of the couple.

Length of Marriage

The length of the couple’s marriage is another important factor. If a marriage lasts 20 years or more, there is a more significant likelihood that long-term alimony or open-durational alimony will be ordered. This is because any career or earning sacrifice made by one spouse was much more likely to be in support of the marriage unit of the two individuals divorcing, rather than their own mutually exclusive choices. While contributions to the marriage like childbirth, child-rearing, and housekeeping are more difficult to quantify in monetary value, New Jersey law recognizes that these choices involve a significant sacrifice to one spouse’s earning potential and directly support the career and earning potential of the working spouse.

Income Disparity

Regardless of the reason for an income disparity between the spouses, when one spouse makes substantially more money, the court is more likely to order alimony. In the “danger zone” of one’s late 40s to early 50s, these factors are less likely to change over time, making the risk of an open-durational order higher.

Marital Lifestyle

The court will also consider the couple’s lifestyle during the marriage, as the goal of alimony is to support the receiving spouse in living a lifestyle that was similar to how they lived during their marriage. Of course this is not always possible, but the aim of the courts is to achieve an outcome close to a similar lifestyle for the time period necessary. If a couple enjoyed a very high living standard and one spouse earned substantially higher income, both of which are more likely to be true in a couple’s midlife to later years, a larger amount of alimony for a long period of time is more likely.

If My Alimony Requirements are Higher, What Kind of Alimony Do I Pay in NJ?

There are a few different types of alimony in New Jersey, some of which you are more likely to pay when your divorce involves the warning signs for substantial alimony obligations.

Rehabilitation Alimony

“Rehabilitation alimony” is generally shorter and is awarded for a period of time to help the receiving spouse get back on their feet, pursue education or job training, and get to a position where they can support themselves.

Open Durational Alimony

“Open durational alimony” is a form of long-term alimony (or the potential to be long-term) that continues until there is a significant change in circumstances like the receiving spouse remarrying or the paying spouse retiring and their income being substantially reduced. The duration of this type of alimony is, as the name suggests, open-ended. Longer marriages then end in divorce often entail open durational alimony requirements.

Reimbursement Alimony

“Reimbursement Alimony,” as the name suggests, is designed to repay the contributing spouse for their investment in the other spouse’s long-term career opportunities and academic accomplishments. For example, if one spouse pays for the couple’s home while the other pursues an advanced degree with higher earning potential, such as medical school, law school, or graduate school, than the spouse who earns more later in their career based on these credentials may be subject to reimbursement alimony obligations during the divorce.

How to Alleviate Some of the Financial Burden when a Large Alimony Bill is Likely

When you anticipate being on the paying side of larger alimony orders, it is important to know that negotiation is possible and there are alternative options available as well. For example, an adjustment in the division of assets could balance an increase or decrease in alimony. A high earner may wish to take fewer marital assets than they may otherwise be entitled to in order to lower the amount of alimony they are responsible for. Similarly, a receiving spouse may find higher value in taking more assets but accepting a lower amount of alimony, particularly if the assets could be liquidated and put into investments that would yield a higher return than the expected alimony.

It is also important for both parties to consider the tax implications of alimony. Alimony payments are not tax-deductible for the paying spouse, but they are also not considered taxable income for the receiving spouse. Settlement negotiations must consider a plethora of factors like total assets, taxes, retirement age, investment opportunities, age, and the future of each individual in order to reach a beneficial agreement.

Get Strategic Legal Guidance for NJ Divorce Involving Sizable Alimony Obligations from Montanari Law Group

If you are divorcing midlife or in your later years and your case involves the warning signs for larger alimony requirements, it is important to work with a divorce lawyer who can provide you with strategic legal advice that is tailored to meet the unique financial considerations of your season of life and earning capacity. A skilled New Jersey divorce attorney at Montanari Law Group will understand the complexities of your situation, including the division of substantial marital assets, retirement, tax consequences, and investment opportunities, along with any anticipated changes such as career shifts, retirement, relocation, or even the possibility of remarriage.

Our renowned team of divorce lawyers will evaluate these factors holistically and project their potential impact on your financial future to ensure that any alimony agreement is fair and sustainable. We encourage you to request a free consultation with our experienced team today. Together, we will help to determine if you are truly in the large-scale alimony arena by analyzing your specific situation. Then, we will help you to determine what your options are. If the parties are unable to reach a fair alimony agreement that protects your rights and interests, we will fiercely advocate on your behalf in court, if necessary.

Our law firm has conveniently located offices in Little Falls, New Jersey, allowing us to assist divorcing individuals with all of their divorce and family law needs in New Milford, Short Hills, Little Falls, Ridgewood, Millburn, Caldwell, Franklin Lakes, Montclair, Wanaque, and elsewhere in the surrounding Passaic County, Hudson County, Bergen County, and Essex County region. Contact us at (973) 233-4396 today to get a head start on your future.