Although she may have dreamed of one day being a “Dr.’s wife”, Nicole Young now likely wants to “forget about Dre” and has filed for divorce after 24 years of marriage. Dr. Dre is a very rich man, reportedly worth $800 million; he is the co-owner of Death Row Records and founder and CEO of Aftermath Entertainment and Beats Electronics (you know, the very large headphones). With his marriage now on “death row”, in its “aftermath”, Dr. Dre will likely be far less rich, and may have to divvy up hundreds of millions of dollars.
Ms. Young is reportedly seeking alimony. In New Jersey, there are four types of alimony: open durational alimony, rehabilitative alimony, limited duration alimony, and reimbursement alimony. Because Dr. Dre and Ms. Young were married for over 20 years, open durational alimony would apply in Dr. Dre’s case if he were getting divorced in New Jersey. Open durational alimony (previously referred to as “permanent alimony” prior to September 10, 2014, when the new alimony law was passed) has no definitive end date. But, in New Jersey, there is a presumption that alimony will terminate when the paying spouse reaches full retirement age (per the social security administration), although the court may set a different alimony termination date if warranted.
I’m using Dr. Dre and Ms. Young as an example of a long-term marriage, however, wealthy clients often do not pay any alimony, and that may well be the case in their divorce. This might not make sense at first blush, but when parties are lucky enough to have substantial assets between them, there may be enough money to go around so that the breadwinning spouse can simply buy-out whatever alimony obligation he or she otherwise would have had.
Let’s say Ms. Young wanted $5,000,000 per year in alimony for the next 5 years, or $25,000,000. Well, instead of paying her alimony periodically, which would prevent her from remarrying (alimony terminates upon the recipient spouse’s remarriage), may be subject to change if she is “cohabiting” in new relationship, and rather than having to worry about Dre’s income potentially decreasing, it’s better for her to have that money up front, even if it is at a discounted rate (i.e. instead of $25,000,000 over a period of five years, $20,000,000 immediately, which the good Dr. can afford). Also, one of the alimony factors in New Jersey is based on the need of the recipient spouse. If Ms. Young were to receive $400 million dollars from Dre, she wouldn’t also need alimony because $400 million would allow her to maintain her lifestyle and she would even earn money on that money.
Alimony—either the amount and timeframe or whether it will be paid at all—is an important part of many cases, and often the most contentious financial issue, both during or after divorce. The Family Department of Cooper Levenson Attorneys at Law has many combined years of experience representing clients on both sides with these issues.