How Alimony May be Decided After Over-Spending
In New Jersey divorces, the question of alimony nearly always involves the “marital lifestyle,” meaning the standard of living that you and your spouse enjoyed during your marriage. The primary intention of alimony is to ensure that neither spouse experiences a catastrophic decrease in his or her lifestyle after divorce. However, with the economy in constant flux, changing economic conditions have become an inevitable part of life. As such, the economy can change before your lifestyle has a chance to adapt, making over-extension of financial resources an increasingly frequent problem. In the case of a divorcing couple whose lifestyle over-reaches their income, the court is faced with the new and difficult challenge of determining appropriate alimony awards. A recent case encapsulates this issue, providing us with invaluable insight into alimony awards when marital lifestyle is simply not the complete picture.
The aforementioned unpublished case, PONZETTO v. BARBETTI, No. A-5715-13T3 (N.J. Super. Ct. App. Div. June 28, 2016)., was decided by the New Jersey Appellate Division on June 28, 2016. The background is as follows: the couple was married for 19 years before proceeding with a highly acrimonious divorce during which division of assets and alimony were points of serious contention. Although no children resulted from the marriage, the divorce was aggressively litigated over an extended period.
The husband had established a business, which the wife was engaged in during their marriage. The business was extremely successful at one point but considerably declined during the recession. Instead of adjusting to their new level of income, the couple continued to spend above their means, maintaining what the judge described as an “artificial lifestyle.”
The New Jersey Supreme Court clarified the determinant of alimony in the precedential case Crews v. Crews (164 N.J. 11) in 2000, stating the following:
“The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living is a factor that must be considered in determining an alimony award. The goal of a proper alimony award is to assist the supported spouse in achieving a lifestyle that is reasonably comparable to the one enjoyed while living with the supporting spouse during the marriage. The importance of establishing the standard of living experienced during the marriage cannot be overstated. It serves as the touchstone for the initial alimony award and for adjudicating later motions for modification of the alimony award when changed circumstances.”
Per the above decision, a judge would typically determine the marital lifestyle of the parties by evaluating expenditures during the last few years of the marriage. In Ponzetto v. Barbetti, the judge decided that “the parties’ irresponsible spending from 2006 through 2008″ was irrelevant in determining marital lifestyle, and thus, equally irrelevant to the alimony determination. The judge instead utilized the marital lifestyle from 1990 through 2006, which was more reflective of actual income and need.
The issue of over-spending has become increasingly relevant to New Jersey divorces, often influencing alimony determinations as well as the division of assets process. In fact, divorce and debt is a common issue in New Jersey divorces, as couples face the division of debts and address issues such as “under water assets.” In these situations, the counsel of an experienced New Jersey divorce attorney is essential to achieving a successful resolution. Our New Jersey divorce attorneys regularly assist clients in Morris County and across the state with navigating these tumultuous waters. Contact our Morristown offices today at 973-828-0829 to receive a free consultation.