Can a party use a voluntary early retirement to avoid paying support?
In Deegan v. Deegan, 254 N.J. Super. 350 (App. Div. 1992), the Appellate Division answered “maybe”, finding that where a former spouse seeks to terminate alimony based upon a voluntary early retirement, closer scrutiny is required. Specifically, the trial court must evaluate the age and health of the retiring spouse, the timing and motive behind their early retirement, as well as the supported spouse’s continued need for support. Moreover, the court must assess the objective “reasonableness” of the decision to retire early and decide whether “the advantage to the retiring spouse substantially outweighs the disadvantage to the payee spouse.” Only if the advantage is found to outweigh the disadvantage may a court view the early retirement as a significant change in circumstance warranting a modification of a pre-existing support obligation.
The foregoing begs the question of under what circumstances will the disadvantage to the spouse who will be left with less or no support not outweigh the advantage to the payor spouse by retiring. The only guidance provided by the Deegan court is this: “where a payor spouse has substantial reasons for retiring…and the effect on the payee is minimal…the balance will be struck in favor of the payor”.