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Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Estate Law
Satisfied Customers: 111657
Experience:  Experienced in Trust and Succession Law, including Louisiana Laws
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An MSA has been agreed upon and a small inheritance owned by

Customer Question

An MSA has been agreed upon and a small inheritance owned by defendant and alimony payor was considered exempt. Parties were divorced and MSA entered into the order. After a protracted unemployment the only asset left to pay alimony is the exempt inheritance, which is in the form of a IRA. Can the alimony payor be forced to liquidate this in order to pay alimony?
Submitted: 7 months ago.
Category: Estate Law
Expert:  Law Educator, Esq. replied 7 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Well, indirectly absolutely they could be forced to use their inheritance to pay the support. The IRA or inheritance cannot be directly attached for the payment of spousal support, but the court can indeed find that because the person has that money available to them, then they have other income available to pay support. In fact, I have heard courts tell clients they do not have to use their inheritance, but they can go get a job and pay what they owe instead and the choice is their choice, which is how I mean indirectly you can be made to use it.
Customer: replied 7 months ago.
In that same instance...if an alimony modification is requested, can the judge count that inheritance in calculations as to ability to pay?
Expert:  Law Educator, Esq. replied 7 months ago.
thank you for your reply.
Yes, they can count the inheritance towards the ability to pay. It frees up assets that you have available to make payments.
Customer: replied 7 months ago.
Your answer above seems to suggest that there would be no way to compel liquidation of the inheritance asset but that the requirement to pay would still exist. If the payor viewed the inheritance as exempt and refused to liquidate, would the payor be incarcerated?
Expert:  Law Educator, Esq. replied 7 months ago.
Thank you for your reply.
That is correct, there is no way to compel liquidation DIRECTLY, as I said there is an indirect way, meaning they can still mandate you pay and not relieve you of that responsibility and could put you in jail for non-payment. So they could force you to get a job and pay from that or use your inheritance to pay, either way they can still make you pay considering that you have this inheritance to support yourself.
Customer: replied 7 months ago.
After a quick internet check I found the following: "While an inheritance is generally not subject to equitable distribution in New Jersey, the income or interest received from an inheritance can be used to determine an appropriate level of alimony. Thus, for instance, the income a spouse receives from an inheritance can decrease that spouse’s need for a certain level of alimony, even if that spouse never worked during the marriage.Notably, it is the inheritance’s potential to generate income that matters, so a spouse who receives an inheritance cannot deliberately shield an inheritance in an attempt to affect to raise or lower the alimony award. It also does not matter if that spouse chooses to actually receive the income derived from the inheritance, choosing instead to reinvest it.This issue was recently addressed again by the Appellate Division in the unreported decision of Overbay v. Overbay, where the Appellate Division affirmed the trial court’s finding that the Wife who had received an inheritance was able to generate additional investment income from the inheritance without any risk of loss or depletion of the inheritance principal. In so doing, the trial court considered expert testimony from both sides, as well as testimony from a court-appointed expert, to determine an accurate imputed rate of return on the inherited investments.You indicate that the inheritance could be used to calculate the amount potential for payment in a modification motion but the above suggests that ONLY the interest income could be used...? Specifically, Overbay v. Overbay, where the Appellate Division affirmed ..." an inheritance was able to generate additional investment income from the inheritance ...WITHOUT any risk of loss or depletion of the inheritance principal.
Customer: replied 7 months ago.
You see, I'm trying to see how to position a statement for a modification motion. Would I list the investment income only and state that the inheritance was exempt from distribution? And, for amounts already equitably distributed...would I just claim that and say they are no longer able to be counted again toward ability to pay....?
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your reply.
The court case is saying really what I said above, about "INDIRECTLY" getting to the inheritance. The principal inheritance is not counted, interest earned on it would be counted, BUT because that inheritance is there to support yourself, they can consider that you have other freed up income. The inheritance is not counted towards calculation of your alimony amount, but it is considered in your ability to pay
So you need to argue correctly that the court should not count the inheritance towards calculation of your alimony amount.
So you are going to correctly claim the inheritance cannot be counted as far as calculation of alimony.
Customer: replied 6 months ago.
Thanks... you partially answered my last question but the final part was... "And, for amounts already equitably distributed...would I just claim that and say they are no longer able to be counted again toward ability to pay....?" ?Importantly, can you please let me know which case or caselaw I can use to reference? Specifically, that inheritance and already equitably distributed assets are not to be used to calculate alimony when seeking an alimony modification.
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your reply.
Amounts already given away or given to your ex are not still part of your assets and as such have no business being counted in any calculation. The assets have to be in your possession.
According to N.J.S.A. 2A:34-23(b), the factors a New Jersey court must consider when awarding spousal support include:
(1)The actual need and ability of the parties to pay;
(2)The duration of the marriage or civil union;
(3)The age, physical and emotional health of the parties;
(4)The standard of living established in the marriage or civil union and the likelihood that each party can maintain a reasonably comparable standard of living, with neither party having a greater entitlement to that standard of living than the other;
(5)The earning capacities, educational levels, vocational skills, and employability of the parties;
(6)The length of absence from the job market of the party seeking maintenance;
(7)The parental responsibilities for the children;
(8)The time and expense necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment, the availability of the training and employment, and the opportunity for future acquisitions of capital assets and income;
(9)The history of the financial or non-financial contributions to the marriage or civil union by each party including contributions to the care and education of the children and interruption of personal careers or educational opportunities;
(10) The equitable distribution of property ordered and any payouts on equitable distribution, directly or indirectly, out of current income, to the extent this consideration is reasonable, just and fair;
(11) The income available to either party through investment of any assets held by that party;
(12) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable payment;
(13) The nature, amount, and length of pendente lite support paid, if any; and
(14) Any other factors which the court may deem relevant.
Customer: replied 6 months ago.
Thanks...sorry to be specific but I have a very specific judge. Let's say that there was an account worth $50,000 that was equitably distributed with 20% being given to the receiver of alimony and the other 80% to the payor of alimony. You say "Amounts already given away or given to your ex are not still part of your assets..." What about the 80% not "given away".... Since this was already determined to be equitably distributed .... should this simply not be counted in a determination for alimony modification? And, aside from N.J.S.A. 2A:34-23(b), is there any other caselaw that reinforces this?
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your reply.
I understand about your specific judge, but all judges have to go by what the law says, even though some may think they can make up their own law.
If the court ordered you to give your ex (for example only) 20% of the assets in equitable distribution, that does NOT count towards your assets for alimony because that 20% is not your asset any longer it is your spouse's asset. The statute enforces it, not case law, but it happens when people do not quite understand the laws and legal process they believe there is a case for everything, but this is just part of the statute on this matter.
She already received the equitable distribution because that was her marital interest, it is not your interest it is hers. For example only, if she got 20% of the marital assets awarded by the court in equitable distribution, that belongs to her it no longer belongs to you and is not part of your assets any longer.
Customer: replied 6 months ago.
I understand that if she got 20% then that is no longer mine... I am asking about the 80% that I retain. In other words, since I have already gone through the process and we agreed to the equitable distribution, is my 80% portion now not used to calculate ability to pay? It seems that the whole idea of equitable distribution is to effectively negate both sides of the equation so the calculation can be made cleaner. If both sides cancel out and my 80% can no longer be counted then I would assume the judge would have to only use the income other than the 80% to determine my ability to pay....?
And, aside from N.J.S.A. 2A:34-23(b), is there any other caselaw that reinforces this? Thanks
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your reply.
No, since you kept the 80% share, that is part of your assets upon which support payments can be calculated. That is your money, your share of the marital assets and as it is your share of the marital assets, they belong to you to pay any bills you need to pay, which would include child support and spousal support. In other words, you are hoping that your assets can be excluded except for any new income to evade or avoid paying support, but that is not what the law says above.
Again, it is the statute, not the case law that applies in your situation.
Customer: replied 6 months ago.
Thanks... I suppose I'm trying to reconcile D'Oro v. D'Oro, 187 N.J. Super. 377, 454 A.2d 915 (Ch. Div. 1982), aff'd, 193 N.J. Super. 385, 474 A.2d 1070 (App. Div. 1984). Where, in D'Oro, the court held that in a postdivorce proceeding, the husband's pension could not be considered "income" for the purpose of determining alimony. The court suggested that it would be unfair if the wife were able to assert what amounts to a double claim on the husband's pension. According to the court, "it would be inequitable for [her] to be able to include his pension income twice for her benefit, first for a share of equitable distribution, and second for inclusion in his cash flow determination of an alimony base." 454 A.2d at 916. The holding of D'Oro was subsequently codified by the New Jersey Legislature in a statute providing that once a retirement benefit "is treated as an asset for purposes of equitable distribution, the court shall not consider income generated thereafter by that share for purposes of determining alimony."So...if something has already been equitably distributed...wouldn't it be the same as a double count, indicated in D'Oro?
Thanks
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your reply.
That is because pension is a monthly amount which the husband had reduced because she was already getting a share of it. In your case, the assets are part of your ability to pay, so that is what they will be considered as you can use them to support yourself and pay support to her. This is not a retirement income we are talking about, these are ordinary marital assets you have received and she has received.
Customer: replied 6 months ago.
Ok let's say that the MSA equitably distributes the inheritance and the 401k and that both represent an ability to pay. If the MSA also listed an imputed income which went to zero because of unemployment wouldn't this be sufficient grounds to claim a change of circumstance?
Expert:  Law Educator, Esq. replied 6 months ago.
Thank you for your reply.
Your ability to pay is already reduced in that case by the amount she has received already. That is already taken into account.
Customer: replied 6 months ago.
So you're saying yes...?
that income reduced to zero because of unemployment IS sufficient grounds to obtain a modification? ...even if there are potential assets to utilize from the equitably distributed accounts...?
Expert:  Law Educator, Esq. replied 6 months ago.
No, of course your assets are not reduced to ZERO, it is reduced to whatever is left after she is given her share. If you are on unemployment, that is a significant change in financial circumstances and that has nothing to do here with the other parts of the question, that is a separate issue you are now bringing up as we have been discussing the assets you were left after the distribution and that is part of your assets and a loss of employment is another part of the issue which is a significant change in your income which is another issue considered in a modification