Law Lessons from KATHERINE MILNE V. ROBERT GOLDENBERG, App. Div., A-2822-07T3, October 15, 2009:

Innes v. Innes, 117 N.J. 496 (1990) represents the culminating decision in a progression that commenced with D’Oro v. D’Oro, 187 N.J. Super. 377 (Ch. Div. 1982), aff’d, 193 N.J. Super. 385 (App. Div. 1984). In D’Oro the court affirmed a trial court’s determination that a spouse’s pension could not be considered income for purposes of determining alimony if the income was derived solely from an asset that had been equitably distributed at the time of divorce. D’Oro’s holding was subsequently statutorily enacted in N.J.S.A. 2A:34-23(b), which, as amended in 1988, provides in relevant part:

When a share of 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.

In Innes, the Supreme Court applied N.J.S.A. 2A:34-23(b) retroactively to preclude consideration of income derived from an annuity purchased with the proceeds of an equitable distribution pension award for purposes of modifying alimony. Innes, supra, 117 N.J. at 504-13.

However, in Steneken v. Steneken, 367 N.J. Super. 427 (App. Div. 2004), aff’d as modified, 183 N.J. 290 (2005), in discussing the possibility of double-dipping arising from the manner in which the husband’s salary and the value of his closely-held business were calculated, the court limited the doubledipping prohibition to pensions, and the court further stated in the pension context:

In New Jersey, the bar against double counting of pensions is restricted to income from pension benefits that have been treated as an asset for equitable distribution purposes. Conversely, the rule does not bar counting as income for determining alimony that portion of the former spouse’s pension attributable to post-divorce employment, and therefore not subject to division as marital property at time of divorce. Innes, supra, 117 N.J. at 504-06; Staver v. Staver, 217 N.J. Super. 541, 545 (Ch. Div. 1987). In other words, a supporting spouse’s pension may be considered for purposes of alimony to the extent that post-divorce earnings enhance its value.

[367 N.J. Super. at 437-38.]

In this case, the court accepted as wholly rational the notion that after-acquired “income” received by a supported spouse — derived from her employment and not from equitably distributed assets — should be considered in connection with any alimony award.

Furthermore, the court held in Heller-Loren v. Apuzzio:

Absent a [property settlement agreement] dictating otherwise, the law generally holds that income is generated by the exercise of an option earned and acquired post-divorce if exercised at a price below fair market value or if sold at a profit. It does not support the contention that stock options should be treated as income upon mere vesting.

[371 N.J. Super. 518, 522 (App. Div. 2004).]

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