Can a decide add a upkeep element to the upkeep fee and apply it retrospectively to the beginning of the proceedings? Is a frugal way of life even vital? | Fox Rothschild LLP

While the problem of savings as a livelihood component has been around for decades, since the Lombardi case in 2016 (which we blogged about before) there has been the problem of the savings component, especially where parties are reasonably frugal but save a lot more at a front burner- Problem.

In Lombardi, the Appeals Department discussed the concept of the marital lifestyle and how savings fit into the lifestyle. In particular, the Court ruled:

A total of “[t]The aim of alimony is to help the supported spouse achieve a lifestyle that is comparable to that which is appropriate during the marriage. “Lombardi v. Lombardi, 447 NJ Super. 26, 37 (App. Div. 2016) (cited Steneken, 183 NJ at 299). The determination of the standard of living experienced during the marriage “serves as a touchstone” in the analysis. Crews, 164 NJ, 16. The marital lifestyle is determined by “taking into account the marital residence, vacation home, cars owned or leased, typical trips and vacations for each year, schools, extra hours, and camps for the following [the] Children, entertainment. . ., Domestic help and other personal services. “Weishaus v.Weishaus, 360 NJ Super. 281, 290-91 (App. Div. 2003), partially revised for others
Reasons, 180 NJ 131 (2004). A determination of marital lifestyle must be based not only on the amounts spent, but ultimately on what is fair. Glass v. Glass, 366 NJ Super. 357, 372 (App. Div. 2004). ….

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“The most appropriate case to include a savings component is that the parties’ lifestyle included regular savings [b]Because it is the way in which the parties use their income that is crucial for establishing a martial lifestyle. “Lombardi, 447 NJ Great. The fact that “the payment of the assistance is ultimately protected by life insurance or other financial instruments does not make the consideration of the savings component any less appropriate.” Ibid. Indeed, “[t]The Supreme Court has recognized the need to account for regular savings in determining a marital lifestyle by including a position for monthly savings in Appendix C of the case information statement that parties are required to submit in family matters. ” I would. at 40-41.

Notwithstanding Lombardi, this problem still arises frequently in high wealth and high income cases, as was the case in the unreported (non-priority) appeals department ruled on May 14, 2021 by AJV against MMV. In this case, the trial judge included $ 5,000 as a savings component in his 11-year maintenance bonus of $ 11,500 per month. In addition, the court retrospectively granted the savings component 52 months, the equivalent of $ 260,000 owed from the husband to the wife in the divorce decree.

In this case, the parties had amassed over $ 8 million in fortune during the marriage. The court found that over the past 7 years (2012-2018) the husband’s income ranged from $ 1,022,923 in the first of the years to $ 633,606 in the last year. The trial judge set assistance by using $ 700,000 in earned income for the husband and approximately $ 74,000 for the wife, based on her earnings history. The parties lived frugally (in fact, the judge specifically stated they had a “frugal lifestyle”, took off-season vacations and / or were related to work trips, largely covered by the man’s employer. They drove company cars and then Fords Because they were able to do it Both parties agreed that saving is an important part of their lifestyle, even the husband acknowledged that they saved $ 12,800 a month in 2012 and $ 21,250 a month in 2013. The trial judge came to that Conclusion The Parties Are Married Monthly The lifestyle was approximately $ 10,588, and they had an additional monthly savings component of $ 19,087. Based on this lifestyle, the trial judge argued that “it will not be possible for either party to revert to the marital lifestyle based on their combined gross annual income of $ 776,415 real to receive. Taking into account their incomes, the need for downsizing, and the income from their equitable distribution, the trial judge concluded that maintenance payments of $ 6,500 per month, supplemented by the woman’s imputed net income of approximately $ 4,000 per month, “corresponds to and.” adequately supports the previous “marital lifestyle” of $ 10,588 per month.

With regard to the savings component, the judge found the following:

… The monthly savings component of $ 5,000 was “fair and reasonable based on the marriage history of the parties,” during which they saved approximately $ 19,087 per month. He realized that “[w]While 50 percent of the monthly marital savings component for each party would be $ 9,543.50. . . The savings component must decrease drastically as a result [Alan’s] Maintenance obligation and its need to support two households. “

The Appeals Division agreed and upheld the decision, stating, “In short, we agree with the trial judge and conclude that the monthly savings component of $ 5,000 is reasonable under the circumstances – especially given the couple’s shared emphasis on regular Savings as part of the marital lifestyle.

The Appeals Department also confirmed the Mallamo loan to make up for the lack of a savings component in the assistance paid during the Pendente Lite phase. Mallamo is the case for the suggestion that pending lite support orders can be changed at any time before the final judgment is received and credits can be given to adjust the support paid prior to the final judgment. Further,

… If the latter is like this, a judge may consider granting the supported spouse a credit to compensate for the fact that the supported spouse was changed at short notice during the pending lite period …

This decision stinks of justice and justice – something that is often difficult to pin down in litigation. Additionally, if the cases drag on, it’s often very easy to sweep credit under the rug. In fact, some people use this as a strategy, knowing that the cost of trying can exceed the amount in question. When a small Pendente Lite was known here, but the income remained substantial, a stroke of luck for the husband was a possible outcome which the court corrected through this retrospective adjustment.

The case was also interesting for the court’s handling of deferred indemnities that were granted before the appeal but vested after the appeal. Look forward to another post on this topic.

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