Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Alimony Chapter 5

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Effect of “No-fault” Grounds No-fault concentrates the attention on fairness & need for support – Irreconcilable differences – Incompatibility – Irretrievable or irremediable breakdown of the marital relationship

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved The Continuing Support Relationship Alimony thwarts the “clean break” approach to modern divorce – Assumes both parties are capable of self-support – Recognizes an uneven playing field in some cases: Lost career opportunities of homemakers out of the workforce during prime earning years, or over the course of a long-term marriage Illness or disability Age Insufficient property to support the affected spouse

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Features of Alimony Discretionary, by court-order Some criteria: – Earning capacity – Marketable skills – Need for education/retraining/recertification or licensing – Lost earnings capacity – Support of spouse’s education/career/profession

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Features of Alimony, cont. Standard of living enjoyed during marriage Property division & amount of separate property available for use Duration of the marriage Parental responsibilities Age & health Tax consequences

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Sources Used for Support Income from principal or secondary employment Rental property, investment, or pension income Income from intellectual property Available income is net (gross income less:) – Taxes, debts, allowable expenses – Prior marital/parental legal obligations Can be imputed with a showing of voluntary un- or under-employment

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved “Spousal Needs” Evidence Employment history Log of expenses Tax returns Career or educational goals Available separate or marital property On-going parental responsibilities that result in lost income

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved The Total Income Package Property division (and income derived from awarded property) factors into the available income Earning capacity Child support (may be mandated by state, or may be a part of a Family Support package) Spousal support may be ordered to fill the gaps

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Types of Alimony Pendente Lite – Permanent alimony – Waived alimony – Nominal alimony – Bridge-the-gap alimony –

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Types of Alimony, cont. Rehabilitative alimony – Reimbursement alimony – – Downs v. Downs

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Escalation Clause Cost of Living Adjustments (COLAs) may be added to alimony, particularly during long payouts Should be tied to a specific objective source, e.g., Social Security Administration’s COLA used for determining benefits paid out over time Reduces unfairness or the need for modification

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Consolidated Omnibus Budget Reconciliation Act (COBRA) Upon divorce, non-employee spouses can elect to continue health insurance coverage under their ex- spouse’s employment health benefits Usually for 18 months, although extensions may be possible in certain circumstances The ex-spouse will have to pay up to 102% of the entire premium (without employer contribution), although this may be included in an alimony award

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Attorney’s fees Initial presumption is that both parties are responsible for their own attorney’s fees and their share of the court costs Counsel fees may be awarded to one spouse – Court will decide the need (inability of one spouse to obtain legal counsel while the other has the means to pay) – Itemized statement required, and may be challenged (“reasonable” standard applied)

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Remarriage, Cohabitation, Death Alimony generally ends when recipient spouse remarries (no “double-dipping”) – Some sustenance awards (usually lowered) may survive re-marriage by agreement To modify or terminate due to cohabitation of the recipient, the court must find: – “circumstances which…alter financial needs of that party.” Usually, the death of either party terminates alimony May order “back-up” insurance, for loss of support

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Survival of an Alimony Claim Requires specific language of intent: “An obligation to pay alimony ordinarily dies with the person who has the obligation, but he may agree to bind his estate to continue alimony payments after his death.” – Pan American Bank v. O’Malley, 353 So.2d 856 (Fla. App. 1977)

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Life Insurance as Surety for Support Divorce ends the beneficial status of “wife” or “husband” Court can order insurance coverage for projected amount of child or spousal support Can require verification of in-force policy to recipient spouse

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Tax Consequences Alimony is income to recipient spouse Deductible from income of payor spouse Child support is not income to the recipient parent Property settlements are not income

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Effect of Bankruptcy Recipient must be given creditors’ notice Property settlements are not dischargeable Child or spousal support recipient is given first priority as an unsecured creditor No bankruptcy unless support is current DSO arrearages can result in conversion of claim or dismissal of a bankruptcy petition

Luppino and Miller: Family Law and Practice: The Paralegal's Guide, 2 nd ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved Enforcement Payor’s responsibility to prove current status Court-ordered support arrearages can trigger a civil contempt court proceeding Arrearages may prompt request for modification – Based upon changed circumstances; Not retroactive Willful contempt may lead to award of attorney’s fees – Payor is able to pay, but unwilling to comply with the order – Payor is unable to pay due to fraud, waste or intentional misconduct