Does An Alimony Obligation Terminate Upon Retirement?

Posted in Divorce

The quick answer to this question is “not necessarily.”

The purpose of alimony is to maintain the dependent spouse at the standard of living he/she had become accustomed to during the marriage.  By law, alimony automatically terminates at the death of the payor, the death of the payee or the remarriage of the supported spouse.  It will also terminate upon reaching the number of years specified in the Court Order or Agreement in the case of limited duration alimony or rehabilitative alimony.

In all other cases, alimony will continue until modified by Court Order.  In order to obtain modification, the requesting party must show that there has been a substantial change in circumstances since the original alimony obligation.  Retirement is an obvious change in circumstances, but that does not end the inquiry.

In the case of Dilger v. Dilger, a former husband elected to take an early retirement at the age of 62 stating that it constituted a change in circumstances sufficient to warrant a termination of his alimony obligation.  The Dilger Court held that in assessing whether the early retirement constituted a change of circumstances, it would have to inquire as to whether the retirement was in good faith in light of all of the surrounding circumstances and whether it was reasonable for the supporting former spouse to elect early retirement.     

In the similar case of Deegan v. Deegan, the payor Husband was just short of 62 years of age when he decided to retire. His union had offered an attractive pension option and work was slow.  He perceived a real possibility of being laid off, and the physical nature of his work was becoming increasingly difficult with age.  It was held that even in a case in which the retiring spouse has been shown to have acted in good faith and has advanced entirely rational reasons for his actions, the trial judge will be required to decide one pivotal issue:   “Whether the advantage to the retiring spouse substantially outweighs the disadvantage to the payee spouse.  Only if that answer is affirmative, should the retirement be viewed as a legitimate change in circumstances warranting modification of a pre-existing support obligation.”  
   
In the case of Silvan v. Sylvan, the Appellate Division held that under appropriate circumstances, retirement at the age of 65 may constitute a sufficient change of circumstances to warrant a modification of alimony.  The Appellate Court sent the case back to the trial court for a hearing to consider the following factors:  the age gap between the parties; whether the agreement addressed the issue of future retirement; whether the retirement was voluntary or mandatory; whether the retirement was earlier than might have been anticipated at the time of the agreement; the financial impact of retirement on both parties; the motivation which led to the retirement; the degree of control retained by the parties over the disbursement of the retirement incomes; and whether either spouse had transferred assets to others, thus reducing the amount available to meet his or her financial needs and obligations.  
  
It was specifically stated in the Silvan case that “we do not hold that one who voluntarily retires is automatically entitled to a reduction in alimony.  Rather, we conclude only that a party who retires in good faith at age 65 is entitled to a hearing on whether there is such a resultant change in circumstances that the alimony obligation should be modified.”     

In the recent case of Bosch v. Alles-Bosch, the Plaintiff/Husband moved for a termination of alimony when he retired as a pilot from the United States Air Force Reserve at the age of 55.  The parties’ Property Settlement Agreement acknowledged that the Plaintiff’s present employment would require him to retire in or about January of 2006 (when he was 55).  The agreement went on to state that this representation was being made without prejudice to the position of the Defendant/Wife relative to the issue of alimony.  After retirement, the Husband did not obtain further employment and intended to train and lease horses which would generate minimal income.  The Court held that Plaintiff’s retirement from the Reserves represented a changed circumstance; however, it did not represent grounds for the Plaintiff’s complete retirement from gainful employment.  Although the parties’ agreement acknowledged that retirement from the Reserves would occur in January of 2006, it did not include the Defendant/Wife’s consent to the termination of alimony.  Further, there was no evidence in the record to suggest that the Defendant/Husband was unemployable in any other field.  It was noted that although many civil service employees retire at 55, they then obtain non-civil service employment, and continue to contribute to Social Security, working until age 65 or more, so additional retirement funds are available.  
   
From a review of case law, retirement, even at the age of 65 does not guarantee a total termination of alimony.  There may be a modification of alimony at that time; however, each case revolves around its own particular set of facts and the Court must weigh all of the relevant factors in determining whether there should be modification and/or termination.  In order to avoid this type of hearing upon retirement, it is crucial to deal with the issue of retirement in your Property Settlement Agreement.

  • Ralph Bloxsom

    I am retiring this year at the age of 68. I have been divorced for 23 years and have paid alimony faithfully. Back a few years ago I had surgery for colon cancer with radiation and chemotherapy. I applied for a reduction in alimony at that time since neither myself or my (present)wife were working at the time. The claim was denied because of the financial statements given by by ex-wife. What kind of a chance do I have in reducing or eliminating the alimony when I retire in October?

  • http://www.stark-stark.com/attorney-lawyer-1011192.html Maria Imbalzano

    Sincerely,

    Maria