In a New Jersey Divorce, How is Support Determined if Incomes Go Up and Down Every Year?
One of the first questions I am asked as a New Jersey divorce attorney in what alimony is a viable claim, is “what is your income?” On occasions where I represent the party who is likely to be the paying New Jersey alimony their soon-to-be-ex, I often get a response like: “Well, it used to be ‘$X’, but there is no way that I am going to earn that much this year”. This statement is usually followed by a variety of explanations, some of which are reasonably valid, while some – not so much.
In an effort to mitigate one’s exposure to having to pay New Jersey alimony, it is not uncommon that judges hear litigants take the position that their income during the year in which they are divorcing is significantly lower than what they have earned in the past. As stated previously, sometimes there is a valid basis for this which would be accepted by a New Jersey Family Court. However, it is also common that the Court's will accept that individual’s representation of their recent reduction in income, but proceed to utilize a three or five year average of their income for purposes of calculating their alimony obligation to their spouse.
There are many reasons why income can fluctuate from year to year (economy, overtime variances, commission based upon sales which vary yearly, etc.). However, when Court’s find that a litigant may be intentionally reducing his/her income so as to otherwise limit the amount in which they would be obligated to pay in alimony, that litigant should be aware that not only does the Court have the discretion to average income earned prior to the filing of the Complaint for Divorce, but also have been known to include the two most recent years after the Complaint for Divorce was filed. This is most commonly done when the Court determines that a party voluntarily reduced their income.
In Platt v. Platt, 384 N.J. Super. 418, 422 (App. Div. 2006), the plaintiff controlled a business and "determined the salary he would be paid each year." In that case, the Court found it was reasonable for the trial court to have averaged the plaintiff’s income over a five-year period, including the two most recent years after the divorce complaint was filed, because he "chose to drastically reduce" his income even though his business was "doing well financially." Id. at 426-27.
So what does this case show us?
The takeaway from this case is that while it is not uncommon for an individual to experience downturns in their marriage as well as their employment consecutively, New Jersey Family Courts do take extra precaution to protect the payee spouse from a payor-spouse looking to intentionally reduce their income to avoid support obligations. Another phrase that you may hear tossed around when referring to this scenario is “divorce planning” and it does not come new to the Court – thus, Court’s have found it more than appropriate to use an average of three to five years of income for purposes of calculating an individual’s alimony obligation.
If you or a loved one ever has a question about New Jersey alimony reform and how it may affect your case, please never hesitate to contact my office.