A professional degree (or license) obtained during a marriage is considered marital property subject to equitable distribution in New York State divorce law. The degree's value is measured in “the enhanced earning capacity it affords the holder” as demonstrated by the holder's employment history and future earnings prospects.
This concept follows from legislation passed by the State Legislature in July 1980, entitled the Equitable Distribution Statute, which intends to ensure fair distribution of marital property upon dissolution off a marriage.
Who Qualifies: Under specific circumstances the spouse who contributed in a “meaningful and substantial” way to the other spouse's efforts to obtain the degree during the marriage is entitled to an equitable portion of the degree's economic value. Substantial and meaningful contributions include financial contributions for tuition, increased household responsibilities, rearranging of schedules to accommodate the student, increased childcare responsibilities, and other assistance that is beyond the expected contributions to a typical marriage. Courts weigh the contributions of both parties to determine the percentage of value that the non-titled spouse is entitled to.
The burden of proof is upon the non-titled spouse who must demonstrate her/his contribution to the titled spouse's acquisition of the degree and also prove the degree's actual value (based upon past and projected earnings) in order to afford the court a sufficient basis upon which to make a distribution award.
How the Court Values a Professional Degree or License in this Context: After it is established that a degree (or license) is in fact marital property the court must place a value upon it and then determine how the value will be distributed to the titled spouse. This has proven to be complex, with advocates and critics pointing to the lack of statutory guidance relative to calculating the many practical factors that contribute to enhanced earnings. For example, while a degree or license may create opportunities for economic achievement, for many individuals the degree merely represents a possibility of future earnings, offering no guarantees. In practice, economic valuation of a license or degree without specific standards and guidelines has been shown to be imprecise and vulnerable to the flaws of subjective judgments. Courts routinely depend upon expert testimony when establishing the value of professional degrees and licenses. The inevitable clash of experts in courts can undermine the overriding purposes of the process which is to achieve equity, fairness, and consistency. Since final judgments cannot be modified, critics point to the potential for unjust consequences because career circumstances cannot be predicted, especially after divorce.
We invite you to contact our office for consultation concerning how equitable distribution of marital assets laws in New York related to professional degrees or licenses may affect your circumstances.
O'Brien Monagan Law Firm P.C. P.C.
18 Corporate Woods Boulevard
Albany, NY 12211-2522