by Maria P. Imbalzano, Esq.
In any award of alimony, the Court is to consider fifteen factors. No one factor is necessarily more important than the others, although the factors we hear about most often are the recipient spouse’s needs, the payor spouse’s ability to pay, the duration of the marriage, and the standard of living established during the marriage.
This latter factor, the standard of living during the marriage, is determined by analyzing the parties’ monthly budget. In the case of Hughes v. Hughes, the court defined the marital standard of living as “the way the couple actually lived.” Not just necessities such as shelter, transportation, food, clothing, and medical expenses are taken into consideration, but lifestyle expenses such as vacations, entertainment, and savings are relevant.
While saving money may have been an important budget item during the marriage when the parties are sharing expenses, it may not be so easy to save once parties are divorcing and now have two sets of expenses.
In any event, savings is a line item on the budget pages of the Case Information Statement — a financial document submitted to the court by each party in a divorce action which sets forth each party’s income, the marital monthly budget as well as the current budget, and a delineation of all assets and debts. Savings is not only monies put aside in bank accounts or investment accounts at the parties’ direction, it is also monies put into a retirement plan such as a 401(k) or IRA. If the recipient of alimony is a homemaker, or earns substantially less than the breadwinner of the family, he or she will need to factor in a savings component to their current budget so as to approximate the lifestyle during the marriage. It is an important component of a budget going forward since savings is often used for unexpected house repairs, renovations, gifts, trips, college education, unforeseen medical expenses and eventually retirement.
It is assumed that the earner during the marriage will continue to earn income after the divorce and contribute to retirement plans while the non-earning spouse will lose the benefit of this income if not employed or earning substantially less than the other party. As a result, the courts in New Jersey have concluded that the level of support to be paid by the earning spouse to the non-earning or lower earning spouse should include an amount for savings.
Of course, the courts, as well as the parties, must be aware of the amount of income available to the parties from their respective employments and consider each of their necessities before determining whether there is enough money to include savings into the recipient’s budget for alimony purposes. In cases where there is ample income and assets, there is still an issue of whether a savings component is necessary given the income that other assets received by the supported spouse may generate.
As in all cases where alimony is an issue, the facts of each case will help determine the needs of the recipient spouse for support and the ability of the payor spouse to pay alimony.
Maria P. Imbalzano is a Shareholder and member of Stark & Stark’s Divorce Group. She concentrates her practice in divorce, custody, adoption and family law mediation. www.stark-stark.com.