14 Dec Will an inheritance change my alimony payments?

Q. I’m divorced and I pay alimony. If my ex inherits about $200,000, what does this do to my alimony payments?
— Hopeful

A. It depends.

The issue of whether or not an inheritance impacts alimony is extremely fact sensitive.

It’s important to know how much alimony is being paid, and what was the basis for the alimony, including the income and financial circumstances of both the person who is paying the alimony and the person who is receiving it, said Jeralyn Lawrence, a family law attorney with Lawrence Law in Watchung.

She said an inheritance of $200,000 may or may not impact alimony.

“While a court would likely not require the recipient of alimony to utilize the $200,000 inheritance to support themselves, a court would attribute a rate of return on that $200,000,” she said. “For example, a court could say that if the $200,000 was placed in a brokerage account, it could earn 4% in interest or $8,000 per year. The issue would then become whether that $8,000 per year is significant enough to impact the alimony.”

Lawrence said you should review your settlement agreement to see whether the inheritance represents a change in circumstances.

If it does, then you would file a motion with the court seeking to reduce your alimony, she said.

“I would strongly suggest, however, that you try mediation before filing any application with the court,” she said. “Mediation is an extremely successful process where a mediator, a neutral third-party, helps facilitate negotiations between the parties to try to reach an amicable and cost-effective resolution.”

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This story was originally published on Dec. 14, 2022.

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