Clarkson S. Fisher, Jr., J.s.c.
The opinion of the court was delivered by: Fisher
CLARKSON S. FISHER, JR., J.S.C.
In this case was raised an interesting issue concerning the extent to which the existence of an asset, exempt from equitable distribution, may be considered in the creation of an alimony award. Aronson v. Aronson, 245 N.J. Super. 354, 585 A.2d 956 (App. Div. 1991) held that the interest income generated by an inheritance could be considered in modifying an earlier alimony award. Aronson determined this was true even if the spouse possessed of the inheritance reinvested the interest income rather than disposing of it.
Plaintiff Harold Stiffler (the payor spouse) used a substantial inheritance to buy a new home and thus invested this inheritance in a manner which does not produce any interest income as occurred in Aronson. The issue debated by these parties is whether the court should impute income to plaintiff for the interest that could have been earned on this inheritance -- if it had been invested in other ways -- for the purpose of setting an appropriate award of alimony.
In an oral opinion rendered on March 7, 1997, the court resolved this and a number of issues raised during the course of a trial which took place on January 13, 28 and 30, 1997. This opinion supplements that earlier decision with respect only to the question of whether there should be an expansion of Aronson's holding.
The purpose of alimony is to provide the dependent spouse with "a level of support and standard of living generally commensurate with the quality of economic life that existed during the marriage." Koelble v. Koelb le, 261 N.J. Super. 190, 192-193, 618 A.2d 377 (App. Div. 1992). N.J.S.A. 2A:34-23 provides numerous factors which should be applied, but the central factors consist of the duration of the marriage and the need for the one spouse to receive and the ability of the other spouse to pay alimony. Aronson considered the impact of the ex-wife's receipt of an inheritance after the entry of the divorce judgment upon an application to modify the alimony she was receiving. While acknowledging that an inheritance is exempt from equitable distribution, the court held that the income generated by a such an asset "is an entirely different matter". 245 N.J. Super. at 363. In speaking for the court, Judge Long said:
When support of an economically dependent spouse is at issue, the general considerations include the ability of that spouse to contribute to his or her needs. To the extent that income is generated by a dependent spouse's inheritance or by any other asset, that income is crucial to the issue of that spouse's ability to contribute. This is true whether the spouse chooses to actually receive the income or whether, at his or her option, it is plowed back into the inheritance. The issue is not actual receipt of funds but access to them. So long as the spouse has the ability to tap the income source, as here for example, where interest is paid on a cash fund, whether he or she actually obtains the cash in hand is inconsequential.
[ 245 N.J. Super. at 364-365 (citations omitted)].
Both parties to this case received an inheritance from plaintiff's aunt during the pendency of this action. To be precise, defendant Mary Ellen Stiffler received approximately $100,000 through the aunt's will; plaintiff received approximately $394,000 in inter vivos gifts from his aunt. *fn1 While the testimony revealed that plaintiff had been the primary or, perhaps, sole beneficiary prior to the end of 1995, events which occurred just weeks before his aunt's death led to a change in her will and the exclusion of plaintiff as a beneficiary. He was replaced by others, including defendant. *fn2
In any event, because of the aunt's death, both parties received certain liquid assets. Neither party claims an interest in the other's inheritance but the argument has been made that the existence of these assets impacts on the claim for alimony. As noted, Aronson recognized that income generated from an exempt asset may be considered in assessing or adjusting alimony. But the Aronson court also said that "so long as the spouse has the ability to tap the income source ... whether he or she actually obtains the cash in hand, is inconsequential." 245 N.J. Super. at 364-365. In Aronson the supported spouse possessed an inherited fund which was earning interest. The interest, rather than being received as income, was being plowed back into the inheritance. Id. at 364. Here, plaintiff has invested his inheritance in a new home which, of course, does not spin off any interest income. He argues his inheritance is irrelevant because a non-income producing asset does not increase his ability to pay alimony.
It is true that the circumstances of this case do not neatly track those described in Aronson. Judge Long said in Aronson that income generated by an inheritance is to be considered in the calculus used to arrive at the alimony award "so long as the spouse has the ability to tap the income source." That is not presented here, although it could be said that the source is "tappable" so long as plaintiff owns his new home, i.e., he can sell or mortgage it to generate income. But is that what Aronson intended?
Like Aronson, cases from other jurisdictions recognize that a matrimonial court may consider an inheritance actually received by one of the spouses in calculating alimony, see, e.g., Petition of Sturtz, 415 N.W.2d 173, 174 (Iowa 1987); Bartlett v. Bartlett, 220 Conn. 372, 599 A.2d 14, 19 (Conn. 1991); some jurisdictions also have found that a future legacy may be considered as a circumstance impacting upon an alimony obligation, see, e.g., Lawlor v. Lawlor, 123 N.H. 163, 459 A.2d 238, 240 (N.H. 1983); Schreiber v. Schreiber, 224 So. 2d 407, 409-410 (Fla. Dist. Ct. App. 1969). As the Utah Supreme Court said in Wilkins v. Stout, 588 P.2d 145, 146 (1978):
Under its equity powers to see that the welfare of the parties... is best served, the court can take into consideration all of the pertinent circumstances. For example, in an appropriate situation, if it should appear with reasonable certainty that one party was about to receive a munificent inheritance..., the court could undoubtedly ...