Divorce FAQ's

Does income averaging work when determining an alimony award?

1. I am a stock broker and I was recently divorced. At the divorce trial, the judge averaged my yearly income and then used the mean average to set a ridiculously high alimony award. Now two years later my yearly income has been slashed in half. Is the concept of income averaging a fair and reasonable way to determine alimony?

Determining alimony is a very heated and debated type of art form. Many people lose their temper and some even pretend to faint when they are told how much alimony they will have to pay. When a court determines alimony it is faced with a most difficult task. Determining alimony is not as easy as it was in the past generations. In the past generations, a husband often had a steady job at a corporation and he earned a steady salary. Now fast forward to our generation X, companies are brought out, go under, and disappear in an instant. Moreover, companies get rid of employees “in a jiffy” just like they are a business machine such as a copier or a fax machine that no longer works. Companies don’t value human resources as much as they used to. Given this scenario, the income of New Jersey’ites fluctuates on a yearly basis. A stockbroker could have earned a high six figure income for most of the past decade. However, after the recent market crash many stockbrokers will be fortunate if they even approach a six-figure income.

A never ending debate is how is at what level of support is income set at to determine alimony when a person’s income fluctuates. Many judge use income averaging to determine a base level of income to determine alimony. An illustrative case is Platt v. Platt, A-1555-04. Here, the defendant- wife and plaintiff-husband were married in 1980. They had two children. The parties separated in 2001, and they separated in November of 2001. The plaintiff also filed for divorce in 2001.

During the marriage, the husband opened up an auto repair shop called Platt’s Performance Plus. At the divorce trial, the court determined that the husband earned $100,000 of annual income, and he awarded the wife $250 week in permanent alimony and child support of $123 per week. The court based this ruling on averaging the companies business over a five year period. Thereafter, the husband appealed. The main thrust of the defendant’s appeal was that the judge erred in averaging his income in fixing alimony and child support. The Appellate Division upheld the family court. The Platt court held that in the circumstances of this case it was completely logical and reasonable to average the plaintiff’s income over a five year period. Thus, the court held that there was no abuse of discretion in the family judge’s analysis and conclusion.

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