Putting a Dollar Figure on Marital Lifestyle
Just a couple of weeks ago, the New Jersey Appellate Division decided a case regarding alimony calculations. More specifically, the trial court was instructed to “to articulate, numerically, his findings regarding the marital lifestyle” for alimony purposes.”
Interestingly, this wasn’t the first time the matter came before the Appellate Division. Back in 2018, the Appellate Division also reviewed the case. They ultimately remanded the matter to the trial court for further consideration. At that time, the lower court increased the defendant’s alimony. Nonetheless, the judge didn’t enumerate the figures as they related to the marital lifestyle.
Accordingly, the Appellate Division decided to reconsider the case based on the latest order. The parties in the case had three children together. Notably, their marriage lasted for many years, and all of their offspring were emancipated.
Both the formerly married husband and wife graduated from college. However, after the birth of their first child, they agreed for the wife to stay home with the children. Thus, the father became the sole breadwinner with an aggregate compensation that capped at $2M annually.
A cursory description of the couple’s marital lifestyle easily suggests the complications associated with high-net divorces. That said, the court opinion points out that the “couple lived a wealthy lifestyle and did not save.” In fact, they liquidated their retirement accounts to fund their lifestyles.
When the parties initially submitted their Case Information Statements, the wife showed monthly expenses nearing $81K. The husband claimed his budget was in excess of $92K. During the time they were married, the wife claimed the family spent between $1M and $1.5M annually. Although it was not proven, she also suggested that her husband hid funds.
Without question, the couple’s marital lifestyle was one of extravagant living – twelve boats, boarding schools, club memberships – and much more.
Trial Court Awarded Permanent Alimony
Before the laws changed regarding permanent alimony, the court awarded it to the wife. The trial court judge cited several factors. Broken down, the judge felt that it was clear the wife was forced to make “sacrifices” as a result of the divorce.
Since the defendant wife relied solely on alimony, she was limited on how she would maintain her prior lifestyle. Additionally, the husband had the advantage of an extremely generous expense account. The wife would also receive additional money as a result of equitable distribution from an investment account.
In sum, the trial court ordered the husband to pay $450K each year, would include $22K in monthly alimony and $186K from his annual bonus. The court further determined that the husband needed to maintain a $4M life insurance policy to secure the alimony obligation.
After reviewing the trial court’s decision, the Appellate Division determined that something was missing. Once again, there was no numerical finding attributable to the parties’ marital lifestyle. This led to confusion concerning the calculation of the alimony award and led to the Appellate Division’s remand in 2018.
The trial court’s reconsideration of the matter resulted in a monthly alimony increase to almost $37K. Meanwhile, the court ordered a reduction in the life insurance obligation to $2/2M.
Upon making the revised decision, the trial court judge referenced several numbers. Life expectancy became a factor as far as the reduction in life insurance.
One of the issues raised by the defendant in the appeal concerned the pendente lite budget she submitted. This referred to a temporary relief sought early in the proceedings. According to the wife, the judge failed to rely on the money they spent as an intact family. The defendant suggested the court’s analysis was, therefore erroneous. Additionally, the judge based the life insurance using the assumption that the husband would retire at full social security age.
Ultimately, the court agreed that the trial court needed to numerically the marital lifestyle and apportion the alimony computation.
Marital lifestyle represents an important factor when it comes to divorce. The Law Offices of Sam Stoia assists clients of high net incomes, as well as those in other earning capacities. Contact our office to see how we can help you.