In the recent published case of Voynick v. Voynick, the appellate court considered the legal standard to be applied in an application for termination or modification of permanent alimony under N.J.S.A. 2A:34-23(j)(3) based on the retirement of a payor when the judgment or order establishing the alimony obligation was entered prior to the 2014 amendment of N.J.S.A. 2A:34-23. The court held that under the statute, that a prima facie change of circumstance can be shown by a recipient’s financial disclosure or other evidence in the record exhibiting: (1) a recipient’s has adequately saved for retirement and no longer has a continuing need for alimony as set forth in the order or judgment to maintain the standard of living enjoyed during the marriage; or (2) a recipient had the ability to adequately save for retirement after the final judgment of divorce and, if they had done so, would no longer have a continuing need for alimony as set forth in the order or judgment to maintain the standard of living enjoyed during the marriage.
There are a few important points to consider in this case. First, the trial court found that because the parties MSA did not have a specific provision stating that retirement could trigger a modification or termination of alimony that the payor/husband could not seek this. The appeals court disagreed. They pointed to the fact that the agreement stated that there was specifically no “anti-Lepis” provision. Lepis is the case that says that support (alimony or child support) can be modified upon a showing of a permanent and substantial change in circumstances. Therefore, the parties did agree that a change in circumstances could warrant a modification of support.
This is an important point to note in drafting settlement agreements. You want to make it very clear to the court whether you intend to be bound by only the reasons for a modification/termination of support set forth in the agreement, or if you can take advantage of any change in circumstances. What is notable is that it is generally understood that so long as there is no anti-Lepis provision that there is no bar to seeking a modification. Here it seems that the trial judge just misunderstood the law. The ruling in this case makes it clear how this should be analyzed, but also tells us that we may want to just go ahead and spell things out clearly so that there is no confusion in the future.
The appellate court also concluded that the amendment to the alimony statute in 2014 constituted a modification of the common law standard under Lepis as it relates to the impact of retirement on alimony. Previously, the law required an obligor to prove their retirement was made in good faith as the first step in showing a prima facie changed circumstance in order to modify an alimony obligation. The court held that by enacting the new statute, the Legislature eliminated an obligor’s affirmative burden under the common law to show that their retirement was made in good faith and replaced it with the requirement that the obligor reach the retirement age under the definition set forth in the Social Security Act.
The appeals court also held that the person receiving alimony is required to produce competent evidence to support their position that they were unable to adequately save for retirement and they have a continuing need for alimony in order to maintain a comparative standard of living enjoyed during the marriage.
What does this mean for you? If you have an alimony obligation (or receive alimony) that was in a divorce settlement agreement filed with the court prior to the 2014 amendments, the law has changed and you may be able to modify/terminate the alimony, or you may have your alimony modified/terminated upon the payor reaching full social security retirement age. There may also be an expectation that you have adequately saved for retirement, even if you have not. If this applies to you, you should consult with an attorney about what to expect and how to plan.
The attorneys at Baker Legal Group are experienced in handling cases when a payor of alimony is nearing retirement. Contact our office today to schedule a consultation to review your agreement and discuss your options.