What Constitutes “Change in Circumstance” to Modify Alimony Obligations
Alimony is designed to provide a dependent spouse with sufficient financial support to maintain a “standard of living generally commensurate with the quality of economic life that existed during the marriage.” Clark v. Clark 429 N.J. Super. 61. 72-3 (App. Div. 2012). Alimony is not intended to punish a payor spouse or reward a dependent spouse, but rather provides financial assistance that is needed by one of the parties.
In determining if there are sufficient legal grounds to reduce alimony obligations, the Courts employ a two part test First, the Court must find that there was an increase in the dependent spouse’s income or a decrease in the payor spouse’s income. Then the Court must review the dependent spouse’s financial circumstances to determine if a decrease in alimony would hurt that spouse’s ability to support himself or herself.
In the recent case of Williams v. Freitag, 2016 W.L. 1589806 (App. Div. April 20, 2016), the New Jersey Appellate Division reviewed an application filed by a payor spouse for a modification of his alimony support payments, and in doing so, provided important guidance.
In Williams, the parties were divorced in October 2006. At the time of the divorce, the wife was unemployed and by agreement, she was imputed with a $25,000.00 per year salary, meaning that she was deemed to earn $25,000.00 per year in determining her entitlement to alimony.
Eight years later, the former husband filed an application to reduce the alimony, arguing that his former wife, was now employed full-time and was earning substantially more than the $25,000.00 amount previously imputed to her. The former wife admitted that her income had increased, but denied that the increases were as high as stated by her former husband. She also explained that the children lived with her and that her expenses increased. The lower Court denied the application for a change in circumstances, finding that the former husband did not prove a prima facie case.
The Appellate Court noted that a decrease in alimony is warranted when “circumstances render all or a portion of support received unnecessary for maintaining” the standard of living enjoyed during the marriage Citing Lepis v. Lepis, 83 N.J. 139, 146 (1980).
The Court listed the following factors, that are set forth in the pertinent statute as being relevant when a downward modification of alimony is sought: the income and financial circumstances of the oblige; the obligee’s reasonable efforts to obtain employment; any changes in the respective financial circumstances of the parties since the day of the Judgment of Divorce; the reason for any change in either party’s financial circumstances since the date of the Judgment of Divorce; and any other relevant factor.
The Court found that the former husband successfully proved that the former wife’s income increased by $16,000.00 above the amount that was imputed to her at the time of their divorce, which was found to be “significant” in light of the parties’ financial situation. Nevertheless, the second prong of the test was not met since the former wife did not have the financial ability to support herself without alimony.
The importance of the Williams case cannot be emphasized enough. Both parts of the Lepis test must be met in determining whether a payor spouse is entitled to a reduction in his/her alimony payments to the dependent spouse. The Court must determine that there was a change in circumstances (i.e, increase in the dependent spouses income or decrease in the payor spouse’s income) and the dependent spouse must still be able to maintain his or her lifestyle.
At Leopold Law, LLC, our New Jersey alimony modification attorneys have over 25 years of experience handling all types of family law matters.