Divorce Financial Advisor

This is the eighth and final blog in the Divorce and Finances series, addressing common questions I hear as a Certified Divorce Financial Analyst (CDFA) during the pre- and post-divorce process. This blog will address alimony in New Jersey. A podcast version of this blog series can be found on our resource center here.

What types of alimony exist in NJ?

There are 4 types of alimony in New Jersey. All awards must follow a detailed analysis of the statutory factors for alimony as provided under N.J.S.A. 2A:34-23.

  1. Open Durational Alimony: This was created when the alimony statute was overhauled in September 2014. This replaced “Permanent Alimony”. Under the new statute, there is a rebuttable presumption that reads: “For any marriage or civil union less than 20 years in duration, the total duration of alimony shall not, except in exceptional circumstances, exceed the length of the marriage or civil union. Determination of the length and amount of alimony shall be made by the court pursuant to consideration of all of the statutory factors set forth in subsection b. of this section.” Other than this durational rebuttable presumption, the concepts applicable to an award of Permanent Alimony are also applicable to Open Durational Alimony. In circumstance of a marriage of long duration where economic need is also demonstrated, permanent alimony is appropriate and an award of limited duration alimony is clearly circumscribed, both by equitable considerations and by statute.
  2. Limited Duration Alimony (“LDA”): This is typically awarded in a shorter-term marriage. “Limited duration alimony” is not intended to facilitate the earning capacity of a dependent spouse or to make a sacrificing spouse whole, but rather to address those circumstances where an economic need for alimony is established, but marriage was of short-term duration such that permanent alimony is not appropriate.
  3. Rehabilitative Alimony: “Rehabilitative alimony” permits a short-term award from one party in a divorce to enable a dependent spouse to complete preparation necessary for economic self-sufficiency and ceases when the dependent spouse is in a position of self-support. “Rehabilitative alimony” represents an appropriate remedy where, for example, a spouse who gave up or postponed her own education to support the household requires a lump sum or a short-term award to achieve economic self-sufficiency. The purpose of “rehabilitative alimony” is to enhance and improve the earning capacity of the economically dependent spouse.
  4. Reimbursement Alimony: “Reimbursement alimony” is intended to compensate a spouse who has made financial sacrifices resulting in a reduced standard of living by enabling the other spouse to forego gainful employment while securing an advanced degree or professional license to enhance the parties’ future standard of living. “Reimbursement alimony” is limited to monetary contributions made with the mutual and shared expectation that both parties to the marriage will derive increased income and material benefits.

Is the Court limited to the types of alimony to be awarded?

No. A court can award (1) open durational alimony, (2) limited duration alimony, (3) rehabilitative alimony or (4) reimbursement alimony, separately or in any combination, as warranted by the circumstances of the parties and the nature of the case.

Contact a divorce financial advisor at Round Table Wealth Management to assist in your pre- and post-divorce mediation.

For more relevant blogs on divorce finances, please check out the other articles in the series:

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