CSG Law Alert: Termination of Alimony Payments When You Retire – In the Tarot Cards or Ghost of a Chance?
In New Jersey, retirement is considered a substantial change in circumstances which may have a significant impact on alimony and can warrant a modification of one’s alimony obligation. If the person paying alimony (the payor) retires, then that person’s income usually decreases, forming a basis for a reduction or termination of alimony. The reduction or termination, however, is not automatic.
Requesting a Change in Alimony
The payor can file an application with the court to modify or end alimony either before retirement or after retirement occurs. Generally, the court presumes that alimony should end upon the payor reaching full retirement age and actually retiring. That presumption, however, can be challenged based on various factors. Those factors include, but are not limited to:
- The age and health of the retiree;
- The timing of the retirement, whether the retirement is voluntary or involuntary;
- Significant changes in the retiree’s financial situation;
- The current health and financial circumstances surrounding the party receiving alimony;
- The terms of the original court order or divorce agreement; or
- The impact upon the recipient.
After weighing all factors and evidence presented, the court will determine if a modification or termination of alimony is warranted.
What if the Payor Retires Early?
The payor may still request a modification or termination of his or her alimony obligation, but the standard is a bit higher as the potential retiree must demonstrate that the prospective or actual retirement is both reasonable and being made in good faith. To make that determination, the court will review and consider various factors, including the retiree’s field of employment, the parties’ ages and the generally accepted retirement age – just to name a few.
For those facing alimony concerns related to retirement, it is crucial to plan ahead. For more guidance on this topic and answers to your questions, consult the family law attorneys at CSG.