Value of a professional degree in divorce could be changing
Professional degrees may no longer be considered marital assets if a recent alimony bill becomes law.
Since the 1980s, New York courts have considered professional degrees and licenses as marital assets for the purposes of calculating spousal support. The courts assume that certain degrees give people greater earning capacity and that such earning capacity should be reflected in how marital property is divided. Recently, according to Bloomberg, the New York Assembly passed a bill, which is still awaiting the governor’s signature, which would do away with professional degrees counting as marital assets. If the bill is signed into law, it could have a dramatic impact on how property is divided in divorce cases involving spouses with a professional degree or license.
Degrees As Marital Assets
The principle of counting professional degrees as marital assets stems from a divorce case that occurred in the 1980s. In that case, the wife had given up her professional career in order to assist her husband through medical school. After the husband completed his education, however, the two divorced and the wife argued that her contribution towards her former husband’s career should be reflected in the alimony payments she was to receive from him.
The judge agreed that the husband’s education, which the wife contributed to, gave him a greater earning capacity that should be taken into account when calculating spousal support. The case established a legal precedent and provided a formula for determining the lifetime value of a professional degree. That formula has since been followed in many other divorce cases in New York.
Changes On The Way
Over the years, however, concerns have been raised about professional degrees being considered marital assets during divorce. One of the main concerns has been that even when the holder of the degree chooses a different career path from what he or she studied, his or her degree is still counted as a marital asset. In such cases the degree may have had no bearing on the spouse’s actual income. Because of those concerns, state legislators passed a bill earlier this year specifically forbidding courts from considering a spouse’s enhanced earning capacity that arose as a result of a degree or license when dividing marital property.
As the Buffalo Law Journal points out, however, the bill does leave room for interpretation. The law, for example, still directs the court to “consider direct or indirect contributions to the development of the enhanced earning capacity of the other spouse” when distributing assets between both parties, which would appear to allow for one spouse’s contribution to his or her spouse’s education to still be taken into account, just in a less formal fashion.
New York family law could see some significant changes soon, which is why anyone going through a divorce should always consult with an attorney who limits their practice to matrimonial and family law. An experienced divorce and family law lawyer can provide the necessary legal advice to ensure that the client’s interests are protected and that the client knows their rights and obligations throughout the divorce process.