Retirement Does Not Necessarily End Alimony.

In New Jersey permanent alimony continues until such time that a court orders it to stop. Alimony awards are modifiable based on a change in circumstance. In most cases, retirement constitutes a change in circumstance.  However, just because there is a change in circumstance does not mean that there is a legal justification for a change in an alimony obligation. In the unreported decision of Elkouss v. Elkouss, the Appellate Division held that even though Guillermo Elkouss had retired due to health issues he was not necessarily entitled to a reduction or termination of his alimony obligation.  Mr. Elkouss was married to Ms. Elkouss for more than 29 years when they were divorced.   He entered into a property settlement agreement where he was obligated to pay his ex-wife permanent alimony in the amount of  $1442 per week.  His property settlement agreement contemplated his retirement at age 62 and specifically stated,

“Commencing with Thursday, February 15, 2001, alimony shall increase to $1,442 per week, payable through the Probation Department via a wage execution.  The alimony will continue until the death of either party, Defendant’s remarriage, her cohabitation with an unrelated individual, or a change in circumstances so as to justify a modification or elimination of alimony including Plaintiff’s projected retirement at age sixty-two.”

Mr. Elkouss retired on December 31, 2010 which was the year-end following his 62nd birthday. His decision to retire was part driven by his declining health which included diabetes and a past bout with prostate cancer.  He then promptly filed a motion to terminate his alimony obligation effective January 1, 2011.  The trial court granted the motion and terminated Ms. Elkouss alimony.  The appeal followed. In its decision, the Appellate Division reiterated the standard for modifying alimony as defined in Lepis v. Lepis;

“[T]he Supreme Court set forth a two-pronged analysis to be applied when family judges examine whether an application for alimony modification or termination should be granted.   The moving party bears the burden of first showing the existence of “changed circumstances” warranting a requested decrease in the amount of alimony awarded.   Upon such a showing, discovery may be ordered and, as necessary, a plenary hearing held to determine whether and to what extent modification is warranted. “

There was no disagreement that Mr.  Elkouss’s retirement was a change of circumstance that warranted a plenary hearing to review the financial circumstances of the parties to determine if a modification or termination of alimony was appropriate. The appellate court stated,

“In its review, the court must consider “‘the dependent spouse’s needs, that spouse’s ability to contribute to the fulfillment of those needs, [] the supporting spouse’s ability to maintain the dependent spouse at the former [marital] standard [of living,]’”

This case was ultimately remanded back to the trial court for further proceedings because the trial court failed to adequately examine “the impact of retirement on the obligor’s continued ability to pay alimony and the needs of the dependent former spouse.” While it is not unusual for a retirement to lead to a reduction or termination of permanent alimony that is not a given.   Unless the property settlement agreement specifically calls for a termination of alimony at retirement or at a specific age, an obligor’s retirement will be nothing more than a change of financial circumstance which does not automatically lead to a termination of alimony.  If you were a loved one has questions regarding alimony or any other family law matter contact the matrimonial attorneys at DeMichele and DeMichele. For a confidential consultation to discuss your situation call (856) 546-1350.