18. If a spouse retires does this constitute a “change of circumstances†to justify a termination of alimony?
If a husband/payor has a good faith retirement at the age of 65 then this event may constitute a “change of circumstances†to justify a modification of alimony. The court will also consider several other factors such as; the age of the parties; how the pensions and retirement assets were divided during the marriage; whether the retirement was reasonable; and was the retirement motivated to reduce alimony. Our New Jersey courts have held that when a person retires at the age of 65, he is entitled to a plenary hearing to reduce alimony based on a “change of circumstances.â€
If a payor spouse retires before the age of 65, then he is subject to a more stringent standard to have alimony terminated. The court will then balance the benefits to the payor spouse against the disadvantage to the payee spouse. Only if the advantage to the retiring spouse substantially outweighs the disadvantage to the payee spouse will the court view the retirement as a legitimate change of circumstances which would justify a modification of alimony.
Some other factors that a court considers when it rules on a Lepis application to terminate alimony on the grounds of retirement are: the age and health of the party; his or her motives in retiring; his or her ability to pay support; and the ability of the other spouse to provide for herself.
19. I have just retired and my income has been cut in half. Can I now make an application to reduce my alimony obligations?
The retirement of the payor/husband may be sufficient grounds to constitute a change in circumstances to reduce or terminate alimony. However, it must be emphasized that retirement alone is not an automatic grounds to terminate alimony. The key issue is whether the payor/husband is retiring voluntarily or mandatorily, and whether his retirement is being taken at the ordinary retirement age, at an eligible early retirement age, or at some other time for some reason. Some basic questions, once answered, will shed some light on the voluntariness of the retirement.
20. What is the key case that analyzes whether a husband’s retirement constitutes a “change in circumstances?â€
The key case that analyzes whether a husband’s retirement constitutes a “change in circumstances†is Deegan v. Deegan, 254 N.J. Super. 350 (App. Div. 1992). In the Deegan case, the husband elected early retirement, and he sought to modify his alimony obligations based on a change of circumstances. The court held that in determining whether to modify alimony based upon retirement as a changed circumstance under Lepis, the pivotal issue was whether the advantage to the retiring spouse substantially outweighed the disadvantage to the recipient spouse. The court concluded that only if the answer was in the affirmative should the retirement be viewed as a legitimate change of circumstances to justify a reduction of alimony.
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