One of the most common divorce-related questions is—will I have to pay my former spouse alimony? If so, how much and for how long?
Alimony, otherwise known as spousal support, is financial assistance paid to a spouse during or after a divorce. In New Jersey, unlike child support, there is no set mathematical equation to calculate alimony. Instead, an alimony determination is based on the factors set forth in N.J.S.A. 2A:34-23(b). Whether alimony will be paid in a divorce depends on multiple factors in the statute, some of the most important considerations include:
- The ability of one spouse to pay alimony,
- Whether the receiving spouse needs alimony,
- The income of both parties,
- The length of the marriage,
- The standard of living established during the marriage, and
- Each party’s responsibility for the children.
How much alimony will I pay in New Jersey?
There is no simple answer to this question. Typically, there must be an earning discrepancy between the parties for one to have a claim for alimony against the other. In other words, the spouse that receives alimony is typically the individual that was financially dependent on his or her former spouse throughout the marriage. The public policy behind alimony is to provide a dependent spouse with additional money that will allow him or her to live a lifestyle reasonably comparable to that enjoyed during the marriage. As a result, alimony is often a heavily disputed topic during a divorce. If a spouse did not work during the marriage, yet can work or earn income, it is well settled that a Court may “impute” an appropriate amount of income to a spouse to determine alimony. Imputation of income involves assigning an income to a spouse based on their earning potential.
How long will I have to pay alimony in New Jersey?
To complicate matters further, there are various types of alimony that can be awarded during a divorce. Alimony could be temporary and only paid during the divorce litigation or it can be awarded for a finite number of years. The current law in New Jersey says that for marriages of less than twenty years, alimony cannot exceed the length of the marriage unless there are “exceptional circumstances.” That means, for example, if you were married for ten years, you will not pay/receive more than ten years of alimony. The length of alimony could be less than ten years but not more. For marriages that exceed twenty years, alimony can be of “open duration” meaning there is no scheduled end date (although it can and will be terminated in a number of circumstances including retirement, disability, cohabitation or remarriage).
Okay, so really, how much alimony will I have to pay and for how long??
Now that I provided the “formal” answer to these difficult questions, I will explain the “rule of thumb” family law attorneys use in New Jersey. Keep in mind that our Federal tax laws changed for divorces finalized after January 1, 2019. Prior to that date, alimony was tax-deductible to the spouse who paid
support and taxable to the spouse that received support. Currently, alimony has no tax effect which means it is no longer a tax deduction to the payor and instead is a net (after-tax) figure. The “rule of thumb” when calculating an alimony figure is approximately 22-25% of the difference between the parties’ incomes paid as a net number. Let’s break that down. For example, assume the Husband earns $200,000 per year and Wife earns $40,000 per year. The difference between the parties’ incomes is $160,000. If we use the 25% figure, then alimony would be $40,000 per year paid as a net number. Again, this formula is not the law in New Jersey, this is only a guide to assist families with a settlement of their divorce.
… and how long will I pay?
The “rule of thumb” when calculating the duration of alimony is approximately ½ to 2/3 the length of the marriage. For example, if the marriage lasted ten years the likely alimony term is between five to seven years.
Alimony is a complex and often heavily disputed issue in a divorce. This topic is filled with nuances and is fact-specific. To learn more about alimony, schedule a no-charge, confidential consultation.