Savings and Alimony
In the recent case of Lombardi-v-Lombardi, the New Jersey Appellate Division addressed the issue of calculating alimony when there is a historical precedent of both parties regularly saving money. The divorcing couple’s annual income was approximately one million dollars. During the divorce litigation, it was evidenced that their monthly spending was approximately $17,000, and additionally, the couple saved about $60,000 per month. After a drawn trial, the divorce court awarded the wife a spousal support settlement in line with the monthly spending budget, but which did not account for any of the regular monthly savings previously mentioned.
During the divorce, the wife had sought half of the monthly savings component to be part of her alimony settlement, but the trial court reasoned against her. They claimed that the savings component is only there to prevent financial risk in the future, and given the extent of the wife’s alimony settlement, that she would not be at future financial risk.
The wife decided to contest this ruling in the New Jersey Appellate Division. The decision was eventually reversed, with the court noting that the savings component isn’t only used against financial risk, it is also used in the case of disaster and other unforeseen circumstances. This decision does not conclude that savings is an absolute right in alimony, the concept of savings, in this case, was a historical routine of the litigants.
The recent update of the New Jersey Family Part Case Information Statement almost certainly helped to play a role in this decision. This is a financial disclosure document required by divorce courts, and it was recently updated to include a savings component. Additionally, the alimony statute was amended in 2014 to clarify that neither party in a divorce is more entitled than the other to enjoy the pre-divorce standard of living.
While the Appellate Division found in favor of the wife in this case, it specifically stated that “We do not decide in this opinion the extent to which the savings component should be considered upon a change in circumstances, such as the payor spouse’s retirement.” This leaves the door open for future interpretations of how savings and a history of saving may affect alimony settlements in the future. It surely raises the question of “Does a history of reckless spending or careful saving affect what is awarded?”
While Lombardi-v-Lombardi may raise more questions than it answers, one thing remains true. When it comes to family law matters such as equitable distribution of property, alimony, child custody and visitation, and child support, retaining experienced family law counsel is highly recommended. It is crucial to have someone who can serve as your guide and your champion, helping you to navigate through the complex legal process of divorce and aggressively advocating for your interests at every turn.
If you are currently facing a family law matter or considering pursuing a divorce, restraining order, or another legal action, it is important to understand all of your available options, as well as the benefits and drawbacks of each. The Passaic County NJ family lawyers of The Montanari Law Group will provide you with an honest assessment of your case and answer all of your questions. With knowledge at your disposal, you can make the most informed, confident decisions for your future and that of your family. Simply call 973.233.4396 to receive your cost-free consultation.