1. Permanent
2. Limited Duration
3. Rehabilitative
4. Reimbursement

Today we’re going to cover the last type of alimony on our list: reimbursement.  The best way this NJ Divorce Mediator can think to explain what reimbursement spousal support is, is through an example.

A couple has been married for 10 years, during which time, the husband attended medical school and did his residency to become a surgeon.  The wife worked three jobs and sacrificed material gains in order to put the husband through school including driving a 1985 Honda Accord and eating Spam and Ramen noodles for dinner 6 nights a week (on the 7th night they got pizza).  Now the husband and wife are getting a divorce and the husband has his medical license and anticipates earning $300,000 a year in a private practice.  In this case, the wife may be entitled to reimbursement alimony to not only repay her for the monetary contributions she made to the husband’s education but also to recognize the loss of that earning potential and the sacrifices she made along the way (like six nights of Spam, as delicious as it may be).

As partners in a marriage, we often knowingly do things that place our needs second in order to make sacrifices for the common good.  We like to think that this is our life partner and we’ll be together forever and so what’s a little short term sacrifice for a stable long-term future?  Sadly, based on your searching for a NJ divorce mediator, that is not always the case.  In our example, the wife sacrificed her present for a chance at a great future with her husband.  With their divorce, that future has disappeared.  Reimbursement spousal support looks to compensate the wife for the money she invested in the husband’s schooling, the material comforts she sacrificed while supporting him during the 8 years of school and residency as well as compensate her to a certain extent for her husband’s future earning potential.  NJ law recognizes that each party is entitled to benefit from the increased standard of living that a degree in medicine will surely bring and through reimbursement alimony those adjustments will be made.

Much like with all other types of spousal support in New Jersey there is no formula for calculating this.  That is why I can’t emphasize enough how important it is you seek mediation services and the help of an Accredited Professional NJ Divorce Mediator.  By working out your differences in divorce mediation instead of a courtroom, you and your soon to be ex-spouse can come to an agreement that works for both of you and not one that works for a judge or your lawyer.  My name is Joseph Dillon and I am an Accredited Professional NJ Divorce Mediator and I invite you and your spouse to come in for a consultation to learn more about how divorce mediation can help you determine what an appropriate amount and duration of alimony or spousal support might be in your particular case.

1. Permanent
2. Limited Duration
3. Rehabilitative
4. Reimbursement

Today we’re going to learn more about what this NJ mediator feels is the most underused type of alimony: rehabilitative.

Typically couples who engage in divorce mediation think that spousal support comes in only one flavor and that’s the typical “check in the mail” in which one spouse pays the other spouse and set monthly amount for a pre-determined period of time until one of the parties encounters a “significant change in circumstances.”  As an Accredited Professional NJ Divorce Mediator with an MBA in finance, I try to help parties expand their options by presenting to them alternatives which they might not have previously considered and rehabilitative alimony is a perfect example of that.

Rehabilitative spousal support simply put is monies paid from one party to the other for the express purpose of assisting the receiving party better their own circumstances through education or job training.  The theory being that is two parties have a wide gap in their incomes and earning potential, that gap can be reduced by bringing the lagging party up to speed through additional training or education.  In these cases, rehabilitative spousal support is paid in addition to permanent or limited duration alimony.  Why is this you ask?  The idea behind rehabilitative alimony is so that an individual can get job training and better their future financial circumstances but they still have to pay their bills while they attend classes so the rehabilitative spousal support is paid in addition to permanent or limited duration alimony.  And while most parties are reluctant to pay any kind of spousal support, let alone two different types of alimony but let’s take a closer look as to why this NJ mediator thinks it can work in certain situations.

A NJ couple has been married 23 years with 2 children and husband has stayed home since day one with the kids.  Wife is 45 and a CFO earning $250,000 and husband is 45 and used to be a computer programmer doing work in C++.  Now the demand for C++ programmers is quite low therefore the husband’s job prospects are quite low.  Since this a long term marriage, we’re looking at permanent spousal support in which the parties have negotiated the duration to be 20 years.  The wife thinks 20 years is quite a long time to be paying alimony so instead she offers 8 years of regular spousal support and 4 years of rehabilitative alimony in which she will pay for her ex-husband to attend a four-year university to get a degree in nursing and a few more years to help him get on his feet.  He improves his earning potential significantly as nurses are in high demand, she reduces her duration of alimony which as a CFO she feels is a good deal and everyone is happy.  As there are no formulas to calculate spousal support, as long as the parties think this is a good idea, then it works.

By working with a Accredited Professional NJ Divorce Mediator such as myself, I’ll help you and your spouse expand your options and help work together to come to an agreement that works in your particular situation.  My name is Joseph Dillon and if I can be of any help to you and your spouse, please feel free to call me at (908) 864-2177 or e-mail me and I’d happy to sit down with you and your spouse for a consultation in one of our many Central and Northern New Jersey office locations.

As a refresher, in NJ, the 4 types of spousal support are:

1. Permanent
2. Limited Duration
3. Rehabilitative
4. Reimbursement

In today’s post, we’re going to focus on limited duration alimony as like with permanent spousal support, the length of your marriage is a factor when deciding if alimony is going to be limited in duration.  Limited duration spousal support is usually reserved for marriages lasting 10 years or less and like all other types of alimony, there is no formula for calculating it so mediators use a number of data points to help couples with the discussion of what might be appropriate in their particular cases.

Now there is much debate in mediation circles what an appropriate duration alimony should be in these types of cases, but as a general rule (remember – this is a blog and is not intended to give legal advice as these are just the experiences of a single NJ divorce mediator) generally, limited duration spousal support for short term marriages lasts 1/2 to one year for each year the couple was married.  Is this always the case?  Absolutely not. Much like with permanent alimony, the incomes of the parties, their ability to work, education level and a host of other intangible factors come in to play when determining an appropriate amount of spousal support.  That why it’s always best to work divorce mediator in New Jersey who can help you work together to come to what you both feel is a fair and equitable amount as remember – there is no formula.

For limited duration spousal support, much like with permanent alimony, the thought is you both contributed to the marriage equally, even if one of you contributed financially and one of you contributed in non-financial ways.  Especially if you have children together, it doesn’t do either of you any good if one of you is living well and one of you is destitute.   Whether you agree with the spousal support laws or not, they are intended to help both parties for a certain period of time after they are divorced, have a chance at a similar lifestyle, even if that lifestyle is lower than the one they enjoyed together as a married couple.  Then after alimony has ended, it is up to each of the parties to continue to work on developing their post-marital lifestyle which is something we stress in divorce mediation as like the old saying goes “I could get hit by a bus tomorrow” so it’s always best to make every attempt to be self-sustaining.

Should you have any questions about spousal support in your particular case, please feel free to contact me, NJ divorce mediator Joseph Dillon at (908) 864-2177 or via e-mail and I’d be happy to meet with you and your spouse to help you determine what an appropriate amount of alimony might be in your particular case.

1. Permanent
2. Limited Duration
3. Rehabilitative
4. Reimbursement

In today’s post, we’re going to focus on permanent alimony.

When one thinks of spousal support the idea of one party writing a check comes to mind and with permanent alimony, that’s usually the case.  But what makes this type of spousal support unique is length of marriage is a primary factor in its determination and how long one would pay alimony (also known as duration in NJ divorce mediation parlance) is permanent.  Does this mean the party paying the spousal support will pay until they die?  Maybe, maybe not…  Like most conversations on alimony, “it depends” and that’s why divorce mediation is an excellent place to discuss this issue.

Permanent spousal support is usually awarded in marriages deemed “long term” which usually means lasting 11 to 15 years or more.  And while this does not always guarantee permanent alimony, length is usually one of the factors in its calculation.  Notice I keep saying “usually” since there is no formula for calculating spousal support so again, that’s why it’s best to work it out using divorce mediation.  Permanent spousal support continues until one of the parties experiences “a significant change in financial circumstances” which may include retirement by the paying party as well as re-marriage by the receiving party.  In both of these cases, the support may be modified or terminated completely depending on the agreement made during divorce mediation.

Another factor in permanent alimony is the earnings of each party.  If one party earns $100,000 and the other works part time, chances are the second party will be unable to earn the same as the first so spousal support will be used to help with the difference.  As a NJ mediator I see this in two scenarios.  First the parties have different levels of education and different earning potential.  Second (and more common these days) one party has worked outside the home and one party has worked inside the home raising the couples children.  Even though both parties may be equally educated and have contributed significantly to the marriage, given today’s economic constraints, the reality of pulling a six-figure salary out of the air after being out of the workforce for a long period of time, is virtually nil.

So what does all of this mean when calculating permanent alimony?  It means it’s best to work with a NJ mediator who can help you and your spouse determine an appropriate amount of spousal support in your particular case since in the absence of a formula, going to court and leaving your fate to a judge is probably not something you’d even want to consider and I can guarantee you that neither of you will be happy with the outcome.

In our next post, we’ll discuss limited duration alimony and how it may apply in your particular circumstances.

1. The length of the marriage - typically the longer you are married, the longer the duration of spousal support will be.  A general rule of thumb is marriages ten years or less alimony will be somewhere between 1/2 to one year of spousal support per year married.  So if you’re married eight years, alimony may last somewhere between four to eight years.
2. The incomes of the parties – if party A makes $200,000 and party B makes $50,000 there is a better chance of receiving alimony than if each party is making $100,000.  spousal support is not meant to penalize one party and enrich the other but rather equalize the standard of living of both parties, post-divorce.
3. The earning potential of each party – say one of you is in a relatively in-demand filed such as health care while the other one of you works in a field such as automobile assembly chances are we’d want to look at what each of you could possibly earn moving forward and agree on an alimony amount to make sure you each enjoyed a relatively stable financial future.
4. The age of the parties – again, a tricky one since “in theory” younger people have more time to ramp up and earn money so the need for spousal support may be reduced down the line.  Conversely those going through a mature divorce will have less time and therefore alimony may be higher or longer in duration.  As a mediator in New Jersey I find this one of the hardest areas to discuss.
5. The educational background of the parties – if one of you has a GED and one of you has an MBA, the chances are good that the person with the more advanced degree will have higher earning potential down the road and therefore that may become a factor in spousal support.

It is important to remember that there is no formula for calculating spousal support or alimony in New Jersey so deciding the length of spousal support or alimony is really up to the parties to agree on.  If you need help deciding the length of spousal support or alimony

in your particular situation, please feel free to call NJ divorce mediator, Joseph Dillon, of Equitable Mediation Services at (908) 864-2177 or e-mail me to schedule an appointment where we can discuss the factors that apply to deciding the length of spousal support or alimony in your particular situation.

• The payment of the spousal support or alimony must be made in cash or check -  While additional distribution of assets during equitable distribution can be used to offset or reduce the payment of spousal support or alimony, it is not considered support in the traditional sense and therefore a non-taxable event.
• A written court order must exist regarding the spousal support or alimony- Because there is no legal separation in NJ, in cases where the parties wish to live apart, a pendente lite order may be drafted while the couple continues to mediate.  This way the “clock starts ticking” and one spouse can receive support and each party can begin their separate lives.
• The agreement must not designate the payment as not being spousal support or alimony - Your Memorandum of Understanding should explicitly spell out what payments are for child support and what payments are for spousal support or alimony.
• The couple generally cannot live in the same household while spousal support or alimony is being paid - There may be times when one party wants to move out to begin anew even though they are not legally divorced but the same can apply if you wish to remain in the marital home.  Given today’s economy more  clients of Equitable Mediation Services chose this route and as long as it is done under a written order form the courts, it can be considered spousal support or alimony.
• Spousal support or alimony can’t be paid after the death of the payer / ex-spouse - In these cases it is common for an ex-spouse to take out life insurance to make sure that any obligations set forth in the couple’s Memorandum of Understanding are satisfied should the payer spouse die before the end of the spousal support or alimony‘s duration.
• The parties cannot file a joint tax return- once you are divorced, you need to file separately.

All this being said, spousal support or alimony can still be considered a tax-free event provided the parties agree as such.  This can be useful in cases where one party doesn’t wish to have to remember to withhold a certain percentage of each month’s spousal support or alimony payment for return to Uncle Sam on April 15th or if the payer wants to reduce the monthly amount they pay and forgo getting it back in a lump sum on the tax their return when they claim the deduction once a year.

In these cases it’s best to consult with an Accredited Professional NJ Mediator who can help you and your spouse determine a fair and equitable spousal support or alimony arrangement in your particular situation.  Please call me, Accredited Professional Mediator Joseph Dillon today at (908) 864-2177 or e-mail me to schedule a consultation for you and your spouse where I will help you both understand what options lie ahead for each of you.

The first question I am asked as a divorce mediator in NJ is “why do I have to pay alimony?”  The basic concept is each of you contributed to the marriage’s success and therefore should share in the financial rewards.  The thought being one party sacrificed their career to support the other spouse by maintaining the family household and children.  Without this support, a high earning spouse would not have been able to earn such a salary and thus, both parties should benefit from it. As we like to say in mediation: one of you worked outside the home and one of you worked inside the home but you both worked.

So how do we agree on an appropriate amount of Spousal Support? This is where mediation really shines.  We start with a budget of what you looked like as an “intact couple” to establish what is known as the marital lifestyle. Then you’ll each do a budget of what life on your own will look like. We’ll then discuss an amount that allows each of you to live a relatively similar lifestyle to each other post-marriage.  Notice I didn’t say the same lifestyle you had as you were married.  We’ll factor in the length of your marriage, each of your incomes, your education, your earning potential and any goals each of you has in regard to your post-marital life.  Perhaps one of you wants to keep the house or one of you wants to pursue a college degree.

So when does alimony end and what exactly defines a “change in circumstances?”  This is an extremely complex matter and one best discussed with a divorce mediator in NJ who can help both of you determine what an appropriate duration may be and in what circumstances alimony may terminate.  In general (this is NOT legal advice) alimony continues until one of you has a “significant change in circumstances” which may be defined as: the receiving party getting re-married, the loss of a job with no prospect of employment for an extended period of time, a significant disability or a retirement.  As each couple’s situation is unique, it’s always best to consult with a divorce mediator in NJ who can help you both decide what you feel is appropriate in your particular circumstances.  The important thing to remember is: alimony is a conversation, not a formula.  This is your divorce so provided it’s within reason, the alimony amount you agree on and how long it lasts can be entirely up to you.

About 15% of the clients we see here at Equitable Mediation Services are what we would classify as an Elder divorce or Mature divorce.  The typical profile looks like this:

• Married 25+ years
• No minor children (under the age of 18) living with them
• Parties in their late 50′s (or older) and either retired or very close to it

In these cases Equitable Distribution of marital assets and liabilities and Spousal Support (formerly known as Alimony) are of utmost important while the notions of Parenting Plans or Child Support are of no concern since the children have now all grown.   While couples going through a Gray divorce or a Silver Divorce, Pension Valuation, Retirement Asset distribution and housing are all of significant concern.

My name is Joseph Dillon and as a NJ divorce mediator who not only is one of only 100 Accredited Professional Mediators in New Jersey but also holds a Master’s degree in Finance, I can help you and your spouse with the extremely complex asset division that a Mature divorce most certainly brings.  Over the next few posts I’m going to take an in-depth look at the issues facing those going through a Gray divorce, Elder divorce or Silver Divorce in the hopes of providing you with the information you need to see that divorce mediation truly is the smarter way to divorce, no matter what your age or circumstances.

We’ll take a look at the issues surrounding the Equitable Distribution of marital assets and liabilities such as:

• The valuation and division of retirement and pension accounts
• The valuation and division of any physical property such as the marital home or rental properties and where will you will live once you are divorced
• Taxation issues facing older couples
• The division of debt and the impact it may have on your credit score

We’ll also examine some of the critical issues surrounding Spousal Support (formerly known as Alimony) including:

• How do we agree on an appropriate amount of Spousal Support?
• When does it end and what exactly defines a “change in circumstances?”

So whether you call it a mature divorce, a Gray divorce, Elder divorce, Mature divorce or Silver Divorce, the fact is you have a choice in how you proceed. If you have any questions about divorce, the mediation process and how divorce mediation can benefit you, please contact us to set up a consultation for you and your spouse in one of our many convenient Northern or Central New Jersey locations where we will discuss the specifics of your case and explain how mediation can help you both move forward peacefully and efficiently saving you time, money and headaches in the process and check back to our blog frequently for the next article in the series.

Many couples are surprised that we even discuss alimony in mediation as for some reason they think they have to go to an attorney which is simply untrue.  Alimony is discussed along with the other three main areas of divorce including the parenting plan, equitable distribution and NJ child support and all agreements are then drafted into the Memorandum of Understanding. Given the vagueness of alimony in NJ, when you think about it, mediation is the perfect place to discuss it.  You see one of the challenges facing divorcing couples in New Jersey is that there is no set formula for alimony like there is in other states.   Alimony in NJ is based on a series of 13 statutory factors which when you really read through them provide little guidance in terms of how alimony is really calculated.  That’s why we use a budget based approach which allows us to discuss what the couples goals are post-divorce and come up with an amount that allows each party to maintain a relatively similar post-marital lifestyle vis a vis each other and to ease the transition from intact family to a separated one.  I’ve said it before and I’ll say it again: this is your divorce – not the courts, not the judge and certainly not your attorney’s so why not discuss with each other what alimony arrangement works in your particular situation instead of leaving it in the hands of complete strangers who don’t know you or your children?  Using mediation for divorce allows you to do just that.

If you have any questions about divorce mediation in NJ using mediation for divorce or how hiring a NJ divorce mediator can benefit you, please feel free to contact Equitable Mediation Services to schedule a free, no-obligation consultation in one of our nine North or Central New Jersey office locations.  Or feel free to visit the Equitable Mediation Services website where you’ll find lots of great information about parenting plans, equitable distribution, NJ child support and spousal support / alimony and contact us when you’re ready.

From our equitable distribution conversations, you have an idea of how your major assets and liabilities are to be divided.  That being said, one of the most important decisions when it come to calculating both child support and alimony is the the decision on housing.  Are you going to sell the marital home or will one of you live in it?  Will you reimburse the other party for their equitable distribution or will they wait to be reimbursed until you decide to sell it?  All of these decisions go to (a) where will you all live (b) how much money each of you will have for housing and (c) how much each of you will need to live your post-marital life.  In addition to the parenting plans we developed earlier, this is a major factor in how we calculate child support and alimony.  If we can have the conversations we need to have, then determining an appropriate amount child support and alimony becomes a lot easier.  You may even establish separate bank accounts and begin the paying of child support and alimony and then behave as if you were roommates and share the household expenses as you see fit.  Then you file whenever you’re comfortable because after all, it’s your divorce, isn’t it so should that be up to you?

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Joseph Dillon is a Professional Accredited Divorce Mediator in NJ and the owner of Equitable Mediation Services a New Jersey divorce mediation practice serving Somerset, Mercer, Middlesex, Essex, Morris, Monmouth and Hunterdon counties including the towns of Edison, Parsippany, East Brunswick, West Orange, Bridgewater, South Brunswick, Hillsborough, Livingston, Randolph, Maplewood, West Windsor, Summit, Plainsboro, Millburn, Morristown, Montgomery, Madison, Readington, Branchburg, Warren, Princeton, Metuchen, Lawrenceville, Pennington, Short Hills, Bernards, Bedminster, Colts Neck, Holmdel, Roseland, Montclair and surrounding areas.