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Is a Professional Degree Marital Property in New Jersey?

Unhappy couple dividing marital property in office of divorce lawyer

During a divorce, shared marital property is divided among the divorcing couple according to the principles of equity and fairness.  Marital property generally means property acquired during the marriage, outside of certain special circumstances such as inheritance or gifts.  But how do New Jersey family courts handle intangible, hard-to-define assets, such as enhanced earning capacity?  If one spouse supported the other spouse throughout their secondary education, for example, does the supporting spouse “own” a “share” of their spouse’s degree?  Continue reading to learn how New Jersey courts value professional degrees, and reach out to a knowledgeable New Jersey marital property division attorney with any questions or for help with a New Jersey family law matter.

New Jersey Supreme Court says degrees are not property

Equitable division of property means a division of marital property in a manner that is fair and comports with the principles of justice.  Moreover, it only involves the division of property.  Clients sometimes wonder whether property includes things of general value but that are difficult to pin down, such as future earning capacity.  In some states such as New York, a professional degree is considered a piece of property that must be valued and apportioned appropriately between divorcing parties.  In New Jersey, the courts have issued a specific answer to the contrary.

A law degree, a medical license, or other professional advancements are not considered assets for the purposes of the equitable division of property in New Jersey.  The Supreme Court of New Jersey made this explicit in a 1982 case known as Mahoney v. Mahoney.  The case involved a husband who took two years off of work to get an MBA at Wharton.  During this time, his wife paid for all household expenses.  A year after he finished his MBA, the parties divorced.  The wife sought reimbursement for, at a minimum, the amount of support she gave her husband while he pursued his MBA.

The court held unequivocally that an “educational degree, such as an MBA, is simply not encompassed even by the broad views of the concept of property.”  The value of a professional degree “for purposes of property distribution is nothing more than the possibility of enhanced earnings that the particular academic credential will provide.  A professional’s earning capacity, even where its development has been aided and enhanced by the other spouse, should not be recognized as a separate, particular item of property.”  It cannot be truly valued because it cannot be sold.  Moreover, valuing “future earning capacity” would entail requiring one spouse to pay for future earning potential that may never even manifest–they could just as easily get a public sector or other lower-paying job, or change careers entirely.

Future earning potential and a spouse’s support of their partner’s educational pursuits are not completely ignored in divorce, however.  These are factors that may be taken into consideration when setting alimony and child support.

Contact a New Jersey Family Law Attorney

If you’re in need of talented, dedicated, and efficient legal help with marital property division, child custody, or other family law matters in New Jersey, contact the Union offices of family law attorney John B. D’Alessandro at 908-964-0102.

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