When New Jersey divorce lawyers analyze an alimony case involving the cohabitation of the recipient of the alimony with their boyfriend or girlfriend, we look at all kinds of monetary benefits that the cohabitation produces. Obvious examples to attorneys handling alimony/cohabitation cases include the paramour paying the rent or mortgage, cellular phone payments, food and pretty much any day-to-day (or month to month) expenses on behalf of the recipient of alimony. However, a recent decision from the New Jersey’s Appellate Court directs lawyers and divorce court judges to also take into consideration “indirect” financial advantages such as vacations, presents and other types of perks that they cohabitant pays for when determining whether alimony payments should be terminated or reduced due to the cohabitation.
In Reese v. Weis, the New Jersey Appellate Division explored and refined the definition and scope of what a substantial economic benefit is. The appellate panel held that when the question of whether a spouse receives an economic benefit cohabitation with another, the Family Part must consider both the actual financial assistance that spouse receives from the new relationship, and also weigh other indirect improvements to the cohabiting spouse’s standard of living that are a direct result from the cohabitation. In this case, after a post-judgment evidentiary hearing, a Family Part judge determined that ex-wife, Rebecca Weis, had received a significant economic benefit from her ten year open cohabitation with another partner such that alimony was no longer appropriate. She appealed the Family Part decision to terminate her ex-husband, Ronald Reese’s alimony obligation to her, and argued that the Family Part court made erroneous factual findings and legal conclusions. The New Jersey Appellate Division reviewed the issue and affirmed the order of the Family Part.
Rebecca Weis and Ronald Reese got divorced on July 17, 1996 after thirteen years of marriage. The judgment of divorce obligated Ronald to Rebecca $ 100,000 a year in permanent alimony. Including his child support obligations to his three children, Ronald would be responsible to pay Rebecca $ 237,872 a year in total support.
Rebecca started cohabiting with a man named William Stein on October 13, 1998, when they moved into a jointly purchased house in Port Washington, New York. She lived there with her three children, and Stein and his two children. Ten years later, on August 12, 2008, Ronald filed a motion to terminate his alimony obligation based on Rebecca’s cohabitation with William. Rebecca stated that William and her had the intention to remain in an exclusive, intimate, long term, romantic relationship. At trial, the Family Part focused on the financial arrangement between her and William from 2006 to 2008.
When Rebecca and William bought their new house in Port Washington, they agreed that they would split the costs according to the size of their families. As such, Rebecca paid four-sevenths of the $ 567,500 price of the house, and the $ 400,000 costs for renovation, and William paid three-sevenths of those costs. At trial, Rebecca testified that she would not be able to afford this type of house if not for Williams initial and ongoing contribution.
Even though Rebecca and William lived together, they kept separate telephone listing, separate checking and individual accounts, and separate personal credit cards. The vacationed and socialized both together and separately, and allegedly did not feel any formal obligation to the other’s family. Regardless, the Family Part found that the evidentiary record showed that Rebecca and William conducted themselves as a family unit. The families took part in family religious events together, Rebecca’s kids referred to William’s parents as their “Grandma and Grandpa,” and they celebrated holidays together. In addition, the children from both parents shared bedrooms, and referred to each other as step-siblings.
Furthermore, Rebecca and William had a joint bank account and joint Visa and American Express accounts that they used to pay for “joint” household expenses. However, the children were also authorized to use the same credit cards. Rebecca contended that she deposited all money she received from child support, alimony, investment income, and gifts into her separate individual savings account. She withdrew $ 8,166 from her personal funds every month and deposited into the joint checking account. Similarly, William deposited the same amount from his personal funds into the joint account as well. This joint account was used to pay the mortgage on the house, repairs, maintenance, real estate taxes, utilities, furniture, landscaping, clothing, food, pharmacy, gifts, dry cleaning dog care, a housekeeper, summer camp and miscellaneous other everyday expenses for all the children.
While Rebecca claimed that she used her individual credit cards to pay for the personal expenses of her and her children, and that she paid the bills for these cards from her personal checking account. While the monthly balance on the joint Visa card was paid from the joint checking account, the bill for the joint American Express card was paid from William’s personal account. Moreover, William personally paid for trips, extravagant vacations, and gifts for Rebecca and the children. He also personally paid for several everyday expenses. These expenses included buying and maintaining all costs associated with a Jeep and Range Rover for the children, paying off the lease on Rebecca’s Mercedes CLK, and then buying her a new Mini Cooper. In fact he took care of insurance, maintenance, and repairs for all of the cars in the household. The trial judge found that Rebecca and William’s finances were intertwined, and that Rebecca failed to prove that her expenses were separate from and paid for by her separate income. Accordingly, the Family Part granted Ronald’s motion to terminate his alimony obligation. The judge found that her relation to William lasted five years longer than her relationship with William and held that Rebecca received an economic benefit from her cohabitation with William. Furthermore, the court held that there was no longer any need for Rebecca to receive alimony for her to maintain a lifestyle comparable to that enjoyed when she was married to Ronald, because she had significant assets, and income and financial support available from her long term partner. Rebecca appealed the decision of the Family Part.
The New Jersey Appellate Division explained that an alimony award may be modified or terminated upon a showing of a significant change in financial circumstances. Cohabitation of the dependent spouse, is one change of circumstance that requires a review of the financial consequences that flow from the new relationship. The 1999 New Jersey Supreme Court case of Konzelman v. Konzelman, defines cohabitation as an “intimate, close and enduring” relationship that requires “more than a common residence” or just a sexual relationship. It requires conduct where the couple takes part in duties and privileges that are usually associated with marriage. This may include living together, commingled finances like joint bank accounts, the sharing of household chores and living expenses, and a recognition of the relationship by the couple’s family and social circle.
A showing of cohabitation establishes a rebuttable presumption of changed circumstances, and shifts the burden to the spouse receiving support to prove he or she, or the cohabiting partner, is not receiving an actual economic benefit. Therefore, the Family Part must focus on whether the financial relationship of the cohabitants is such that one cohabitant subsidizes the other.
Determining whether a dependent spouse gets a economic benefit from cohabiting with another partner is a fact sensitive inquiry. A Family Part judge has the obligation to make findings about whether the benefit given by a cohabitant is such that it was changed or taken away the need for alimony. First, the judge must review the financial arrangements involved to determine if the cohabitant actually contributes toward the dependents spouses’ necessary costs, like food, housing, transportation, clothing, or insurance. If that is the case, then it is clear that the cohabitant gives the dependent spouse a direct economic benefit. Then the judge must consider indirect economic benefits, which include a cohabitant’s payment of his or her own expenses. Indirect economic benefit may also stem from intertwined finances, as the commingling of funds blurs the line of each party’s economic responsibility, and may result in one party subsidizing expenses for the benefit of the other. This reduces the ability to prove economic independence.
The New Jersey Appellate Division held that enhancements to a dependent spouse’s standard of living, are a tangible economic benefit. In this case it was clear that Rebecca and William’s finances were intertwined. Furthermore, the cohabitation provided Rebecca with a clear economic benefit, through William paying for her direct and indirect expenses, which enhanced her lifestyle above the one she enjoyed during her marriage to Ronald. As such, the New Jersey Appellate Division affirmed the order of the Family Part. `
If you face an alimony case involving cohabitation, please give our office a call to learn how we may help you.