Introduction
In a recent Appellate Division decision, Voynick v. Voynick (A-1264-23), the Court addressed significant legal standards concerning the termination or modification of permanent alimony under N.J.S.A. 2A:34-23(j)(3), based upon the retirement of the obligor/payor when the judgment or order establishing the alimony obligation was entered prior to the 2014 amendment to N.J.S.A. 2A:34-23. This case provides valuable insight into how the New Jersey court evaluated an alimony obligation when the supporting spouse retires, especially under the amended statute.
Background
The parties, Diane Voynick (Plaintiff-Respondent) and Brian Voynick (Defendant-Appellant), were married in 1979 and divorced in 2003. The Final Judgment of Divorce (FJD) incorporated their Property Settlement Agreement (PSA), which stipulated that Brian would pay Diane permanent alimony of $120,000 per year. At the time of the divorce, Diane was 48 years of age
and Brian was 47 years of age. Brian was the owner of a veterinary practice and continued to operate his veterinary practice until he sold it in September, 2020. Brian continued to work part time with the new entity. Brian’s compensation was based upon his commissions until his retirement in May, 2021. During the marriage, Diane was primarily responsible for the home and the children, but also worked as a bookkeeper at the hospital after defendant established it several years into the marriage. She ceased working at the veterinary practice after the divorce, and did not obtain alternative employment after the divorce. After retiring Brian continued to pay alimony and became eligible for full Social Security retirement benefits in April, 2023, twenty years after the divorce.
Legal Issue
In July 2023, Brian filed a motion to terminate his alimony obligation. He asserted that upon reaching full retirement age, his retirement constituted a substantial change in circumstances warranting a termination in alimony. Diane opposed the motion, asserting her continued need for alimony due to health issues and her current financial situation. The trial court initially determined that Brian failed to show a prima facie change in circumstances under N.J.S.A. 2A:34-23(j)(3) that would warrant a termination of his alimony obligation. Brian appealed that decision, asserting the trial court erred in its determination.
Court's Analysis
On appeal, the Appellate Divisions decision outlined several key points:
- Good Faith Retirement Age: The court acknowledged that Brian had reached a "good faith retirement age" as defined by the Social Security Act, which is a critical factor under N.J.S.A. 2A:34-23(j)(3).
- Prima Facie Showing of Changed Circumstances: While Brian has reached a good faith retirement age, the court emphasized that merely reaching retirement age does not automatically warrant termination of alimony. Therefore, Brian needed to demonstrate that his retirement substantially impaired his ability to support himself under the same standard of living enjoyed during the marriage and continue paying alimony.
- Financial Circumstances: Brian failed to provide sufficient information to enable the court to undertake an appropriate analysis of his income and assets to determine whether there was a prima facie showing of a change in circumstances. The court found that Brian's financial disclosures did not support his claim that he could no longer afford to pay alimony. Brian failed to adequately categorize the assets in his CIS and failed to engage in any financial analysis including an income stream analysis of his non-immune assets. Therefore, the court found the approximate $8 million in assets held by Brian at the time he made the application and the potential income that could be generated from these assets demonstrated he had the ability to continue paying alimony.
- Plaintiff's Ability to Save for Retirement: The court also considered Diane's ability to save adequately for retirement. Diane's did not provide adequate financial disclosure exhibiting that her financial circumstances demonstrated a continuing need for alimony, nor did she provide any specific reasons or analysis showing her inability to have saved for retirement over the past 20 years since the divorce. Diane showed a net worth of $2.75 million, but the court found genuine issues of material fact regarding her ability to save and her continuing need for alimony.
Decision
The Appellate court concluded that the trial court misapplied its discretion in determining that Diane’s opposition to Brian's motion had satisfied her obligation to prove her current financial circumstances, or that she was unable to adequately save for retirement requiring a continuation of alimony at its current level of $120,000 per year. Therefore, it vacated the trial courts order denying Brian’s motion to terminate alimony and remanded the matter back to the trial court for to set a discovery schedule and ordered a full plenary hearing. The court directed both parties to provide detailed financial information to assess whether a modification or termination of alimony is warranted. At the hearing, the burden will remain on Brian to prove, by preponderance of the evidence, that a modification or termination of alimony is warranted under N.J.S.A. 2A:34-
23(j)(3).
Implications
This case underscores the importance of formulating a comprehensive outline, with financial disclosures, and a detailed analysis when seeking to modify or terminate alimony based on a payor’s retirement. It highlights that reaching normal retirement age and retiring from employment is insufficient and does not trigger an automatic modification or termination; the obligor must demonstrate a substantial change in financial circumstances impacting his/her ability to continue paying alimony at its current rate. Additionally, the court's consideration of the obligee's ability to save for retirement is crucial in determining the continuing need for alimony.
Conclusion
The Voynick v. Voynick, decision provides a nuanced approach to evaluating alimony obligations upon retirement, balancing the financial realities of both parties. It serves as a reminder that thorough preparation and detailed financial analysis are essential in family law cases element of consideration involving an application for alimony modification or termination.
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