Is Your Husband’s Professional Degree Marital Property?

 

In many marriages, one spouse may decide to earn an advanced professional degree to start a new career path or further an existing career. The degree might be for medicine, law, accounting, or another similar path, and earning an advanced degree is necessary to obtain a license to practice in many different professions.

The problem is that professional degree programs can be lengthy and rigorous, so it is imperative to have the support of a spouse while someone is pursuing this type of educational program.

Is Your Husband’s Professional Degree Marital Property?

How Wives Might Contribute to Professional Degrees

There are many ways that a wife can contribute to a professional degree for her husband. First, it can be difficult for a husband to work while pursuing a degree, so the wife may accept the full bread-winning responsibilities while her husband is in school. Her income might cover all of the household expenses, as well as educational expenses. After the degree is earned, a wife’s income might go toward paying off student loans and other educational costs.

An advanced degree and professional license can increase a husband’s income once he is done with school, which can improve the standard of living of both spouses moving forward. However, what happens if a divorce occurs? Does the husband get to solely enjoy the future benefits of his degree? Does a wife get reimbursed for her contributions to the professional degree?

How Degrees are Treated in Divorce

How a degree will be treated in your divorce will depend on the specific jurisdiction overseeing your case. Different jurisdictions have their own approaches regarding how degrees are treated in divorce. For example, for decades, the State of New York considered a degree to be marital property, and the value of the degree would be divided between divorcing spouses. However, New York reversed this policy as of 2016, and a degree is no longer treated as marital property.

That a degree is not marital property is the majority view of courts throughout the United States and Canada. Most states in the U.S. follow this principle, and the precedent in Ontario and other Canadian provinces is the same. Generally speaking, a degree or license cannot be sold or transferred like property, and the degree itself has no guaranteed future value without the choices and acts of the degree-holder to earn a living based on the degree.

However, this does not mean that a wife should get nothing in return for her contributions to a husband earning a degree. There are different ways courts handle this situation, depending on the specific circumstances at hand and the jurisdiction.

Options for Wives Regarding Professional Degrees

Courts can take different approaches to ensure that wives are fairly compensated for their sacrifices and contributions to a husband’s success. A couple of examples of how this matter might be addressed by a divorce court are as follows.

Reimbursement Approach

This approach acknowledges that a wife used marital assets to pay for the educational program, and requires the professional spouse to replace marital assets a wife lost as a result. While a wife does not necessarily have the right to a degree as property, she might have a right to reimbursement for her investments, from which she received no lasting benefits. This could be in the form of a larger property distribution, a lump-sum payment, or an alimony award.

Alimony as Compensation

In many situations, a husband’s professional degree will give him a higher earning potential for the future. On the other hand, a wife may have put her career aspirations on hold to support the household and husband while he earned the degree and professional license. When a divorce arises, the two spouses may have a discrepancy in their earning abilities.

A wife should not have a lower standard of living than her spouse after contributing to his professional degree and making sacrifices regarding her own career for the good of the marriage. In this situation, a court may award the wife alimony to accomplish one or more of the following:

• Compensate her for her contributions
• Help her enjoy the standard of living she had in the marriage if she cannot afford it based on her current earning power
• Allow her to obtain her own education or training needed to boost her career and earning potential

Overall, the law in most jurisdictions generally supports the fact that spouses have the duty to support one another, including to help them obtain professional degrees and meet other goals. For this reason, a degree is generally not considered to be marital property, though there are other ways that wives can be reimbursed for their selfless contributions to a spouse’s professional future.

When you and your spouse are discussing property division and possible alimony awards in your divorce case, it is important to know your rights in your jurisdiction. This can help avoid agreeing to a property division resolution that fails to properly compensate you for your contributions and sacrifices. It is always a wise idea to discuss the complicated property and financial issues, such as professional degrees and income discrepancies, with an experienced divorce lawyer who can advocate for your rights.