Q. If my ex-wife just inherited half of a house from a relative and the house is sold for a profit of, say, $200,000, can that reduce my alimony payments? If so, do I need to file a petition once the house is sold, or can I do it now since the house has already been bequeathed to her?
– Divorced
A. It's not that simple.
It all depends on the specific facts and circumstances of your and your ex-partner's divorce, your respective financial situations at the time of your divorce, and your respective current financial situations.
Once a support obligation is established, it remains at the original amount unless there is a later mutual agreement between the parties or a court order, says Kenneth White, a licensed divorce attorney with the Edison law firm of Shane and White.
“To obtain a court order over your ex-partner's objection, you must file a petition for maintenance and provide supporting documentation to the court,” White said. “To qualify for judicial review and potentially modify or terminate your maintenance obligation, you must meet your burden of proof and show that a 'substantial, permanent change of circumstances' has occurred.”
So what counts as a “significant, permanent change in circumstances?” That depends on the circumstances, says White.
For example, if your support obligation were set at $100 per week, that would be a completely different situation than if your support obligation were set at $1,000 per week.
“If it was $100 per week, it could be argued that your ex receiving a lump sum payment of $200,000 – a sum equivalent to 2000 weeks of alimony – has significantly reduced her alimony requirement, either due to the lump sum payment itself or the potential income such a lump sum payment can generate, and that the alimony obligation should therefore be reduced or eliminated,” he said. “However, if the original obligation was set at $1,000 per week, a lump sum inheritance of $200,000 would likely not lead to the conclusion that there was a 'significant, permanent change in circumstances.'”
The financial situation of your ex-partner and your partner at the time the original maintenance obligation was determined is also important, he said.
For example, if you each had a net worth of less than $100,000 at the time your support obligation was established, a $200,000 inheritance could lead to the conclusion that a “significant, permanent change in circumstances” has occurred, White said. However, if you each had or have a net worth of more than $1 million, a $200,000 inheritance would likely not result in you being relieved of your originally established support obligation, he said.
White said numerous other factors must be considered in analyzing whether a “significant and permanent change in circumstances” has occurred that warrants a review and possibly modification or termination of the support obligation.
This may include your annual income and earned income at the time the original maintenance obligation was made compared to your current income, and whether the maintenance obligation was “perpetual” – that is, permanent – or whether it was set for a limited period of time.
Given all the variables, it would be wise for you to consult a divorce attorney who can review the specifics of your situation.
Email your questions to Ask@NJMoneyHelp.com.
Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com's weekly e-newsletter.
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