Preparing for a rainy day is an aspect of financial planning that most of us learn early on in our lives. Even those who earn high salaries and contribute to retirement plans could end up financial ruined from circumstances like job loss and disability. If one has children, it's essential to start planning early for the many expenses associated with their health and well-being. Married couples, in particular, are careful about putting aside a certain amount of money each month. What happens to that money, though, when a couple chooses to divorce?
This question was not officially addressed by the New Jersey courts until quite recently, when Case Information Statement (CIS) forms began to include “savings” as a specific item for financial disclosure. It is rather interesting that it took this long for marital savings to be recognized as part of a couple's finances, especially for long-term marriages where spouses may have put away hundreds of thousands, perhaps even millions of dollars into savings. Furthermore, it wasn't until September of this year when the NJ Appellate Division officially recognized the need to consider savings as a possible component in the calculation of alimony.
In the case of Lombardi v. Lombardi, the plaintiff argued that her alimony award should have included half the amount that the couple had put aside as savings throughout their marriage. This was a significant sum of money, since the couple had managed to put away about $60,000 a month. Because the wife received a sizable alimony payment -- $17,000 per month -- and was not at financial risk, the trial court ruled that the savings did not need to be considered a component of the alimony award. Rather, it should be viewed as a form of insurance to guarantee alimony into the future.
The appellate court reversed the trial court's decision, saying that while savings is not guaranteed as part of alimony, it must be a consideration in marriages where there has been a clear history of savings. It's important that the savings is fact based, meaning that it can be clearly illustrated through documents like bank statements, or an agreement between the couple to put aside a certain amount of money each month. Another important factor in the Lombardi case is that the marital monthly budget was significantly less than the marital savings. Hence, the appellate court concluded, “It is not equitable to require plaintiff to rely solely on the assets she received through equitable distribution to support the standard of living while defendant is not confronted with the same burden.”
As you can see, a marital standard of living can include many different types of assets, but what actually counts as marital assets for you depends on the unique circumstances within your marriage. Thus, it's important to work with an experienced divorce attorney, who can help you receive the alimony settlement that you deserve. Please find out more about your alimony rights and legal options during a free consultation.
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