The Valuation of Academic Degrees in a Divorce

In a December 23, 2012 article in the Wall Street Journal, reporter Sophia Hollander writes about how New York State considers a license or professional degree acquired during a marriage to be property that is to be divided between spouses in a divorce.

The original idea behind the law, when it was drafted decades ago, was to protect women in a divorce. Today, with more women earning licenses and degrees, many lawyers and observers of the law believe that the law now does more harm than good. This law is seen by its critics as creating longer and more contested trials and causes unfair outcomes.

Before 1980, all the assets acquired during the marriage, such as a house, a car or a savings account, reverted to the titleholder. As a practical matter, this typically meant that men retained most of the assets, while women were left with little. That year, lawmakers passed an equitable distribution law, which posited that marriage is an economic partnership. Anything acquired during the marriage, then, was an asset to be divided between the two partners.

In a significant Court of Appeals case decided in 1985, concerning a wife that supported her husband through medical school, the court decided that the wife deserved a share of the value of his medical license as recompense for her efforts.

Many observers believe that New York courts have gone too far. Over the years, the statute has been expanded from licenses to include degrees and even unique marketable talents. Now judges must always value the license separately from tangible assets such as professional practices.

There is widespread agreement that a spouse who sacrifices a career to advance his or her partner deserves recompense. The question is: How? Some panels and commissions that have been established to consider the issue have recommended that the law be eliminated. At times one spouse really does help another achieve advanced degrees and licenses. This type of support can range from being the spouse earning money, raising the children, providing the food, and moral and emotional support.

Instead of making a sort of formulaic method for deciding on the value of these licenses and degrees, the contribution of the other spouse should be part of the story of the couple that needs to be factored in at the end of a marriage. Instead of having a battle of the experts in determining exactly how much a degree or license is worth, the contribution of the other non-degreed or licenses spouse should just become one of many factors a judge can weigh in determining the award of alimony at the conclusion of a divorce proceeding.

It has been the trend to distribute a portion of one spouses business and/or professional license and degree to the other spouse, far less than a 50/50 basis. Our firm handles almost 1000 cases a year and we have our finger on the pulse of most decisions. We have successfully been able to track and report how courts are deciding these matters. In the counties of Manhattan, Kings, Queens, Nassau and Suffolk, courts are giving far less to the spouse that didn’t actually earn the degree then they were years ago. In fact, with respect to businesses, when a spouse owns a business the non-titled spouse (if they did not directly work at the business or work to create the business) is getting between 15%-35% of the business valued at the time of commencement. With respect to degrees, the degrees evaluated and a spouse's share has now been reduced proportionately based on the fact that the spouse did not actually earn the degree but only supported the other spouse while they were earning the degree. The law is going towards more equitable distribution and further away from “equal” distribution.

Bryan L. Salamone & Associates, P.C. handles almost 1000 cases a year in New York City; the surrounding boroughs, Nassau and Suffolk county, as well as White Plains. Mr. Salamone is available for personal consultations in selective matters free of charge. To learn more about Bryan L. Salamone & Associates, P.C. visit their website at www.divorcelawyerlongisland.com or contact them directly at 1.631.479.3839.