New law will change alimony landscape in NH
Set to take effect on Jan. 1, it provides a new framework for determining payments
In June, Governor Sununu signed a bill that substantially changes New Hampshire’s alimony law. The law will become effective for cases filed on or after Jan. 1, 2019.
State alimony law currently has no formulas for determining the amount and duration of alimony. As a result, alimony orders often vary from court to court. The new law attempts to provide a framework for greater predictability. It also defines standards for modifying and terminating alimony.
Interestingly, federal law on alimony will also change Jan. 1, when all new alimony orders entered after will no longer be tax-deductible to the person paying alimony or be taxable income to the person receiving it.
These are the new law’s highlights:
1. The purpose of alimony is to allow both parties to maintain a reasonable standard of living. A party may request alimony while the divorce is pending or no later than five years from its effective date.
2. The “payee” requesting alimony must show a need for support followed by a showing that the “payor” has the ability to pay. Formulas set the amount and duration of alimony absent an agreement between the parties. The amount of alimony shall be the lesser of the payee’s reasonable needs, or 30 percent of the difference between the parties’ gross incomes.
In using the formula, gross income is reduced by the amount of child support or alimony paid for a prior family, child support paid for the kids of the present family and costs for health insurance for the benefit of the other party.
The maximum duration of alimony shall be 50 percent of the length of the marriage, unless the parties agree otherwise or the court finds that justice requires an adjustment considering the following factors:
• The degree and duration of any financial dependency of one party on the other. Vocational skills, occupation, benefits available from employment, and the present and future employability of both parties.
• Voluntary unemployment or underemployment of either party
• The special needs of minor or adult child of the parties
• Property awarded to the payee
• The conduct of either party during the marriage, including abuse or fault
• Differences in the parties’ benefits under the federal old age, survivors and disability insurance social security program
• Diminution of significant assets by a party
3. The length of the marriage is defined as the number of months from the date of the marriage to the date of service of the petition for divorce, legal separation or annulment. The Court has discretion to use a different beginning or ending date.
4. The statute terminates alimony at full retirement age, unless parties agree otherwise or the court finds that justice requires a different termination date based on special circumstances.
5. The statute requires the payee to show a need or an inability to be self-supporting at a standard of living that meets reasonable needs through appropriate employment, and the payor is able to meet his/her own reasonable needs. In both of these tests, the court must consider the lifestyle of the marriage and the need of both to adjust their standard of living due to the separation. Income from overtime or a second job is excluded from the payor if it began after the parties’ separated or the petition was filed.
6. The court can order a step up or step down in alimony, which means that it can decrease or increase the alimony generated by the formula in specified steps.
• Alimony ends upon the remarriage or death of the payee. If the payor dies, the alimony award becomes a charge against the payor’s estate except to the extent that such obligation is covered by life insurance or other security.
• Requests for modification may be made while alimony is being paid or within five years from the end of the initial alimony order. The moving party must satisfy a three-part test by clear and convincing evidence, a higher standard of proof than the current law. The test requires a substantial and unforeseeable change of circumstance since the effective date of the alimony order; no undue hardship on either party; and justice requires a change in amount or duration.
Income from a second job or overtime is excluded when considering a modification request if it began after the date of the initial alimony order. If child support is a factor in determining the amount of alimony, alimony may be recalculated when child support is modified or terminated without meeting this test.
• A payor may request a modification of alimony based upon cohabitation. The court may consider these factors:
• Living together on a continual basis in a primary residence
• Sharing of expenses
• The economic interdependence of the couple, or economic dependence of one upon the other
• Joint ownership or use of real or personal property, including financial accounts
• The existence of an intimate relationship between the persons
• Holding themselves out to be a couple through statements or representations made to third parties or are generally reputed to be a couple
• Any other factors that the court finds material and relevant.
While the new law will likely change the manner in which alimony cases are handled by the court, it provides guidelines that parties can use to negotiate a settlement of their alimony issue and avoid a hearing. Anyone facing divorce is encouraged to speak with an attorney to discuss the application of the law to his/her particular case, including the timing factors under both the federal and state law changes.
James V. Ferro Jr., who heads Ferro Law & Mediation Group, Manchester, can be reached at 603-836-5400 or firstname.lastname@example.org.