For many years New York Courts treated a degree, such as a law degree or a medical license earned during the course of a marriage as property. This property could be divided, in a similar manner as one would divide a home purchased during the course of a marriage. The process to divide a degree or license consisted of complex steps which required a divorcing couple to first hire an expert to value the degree, this value, called “enhanced earnings”, the difference income the degree holder, would have made without obtaining the degree and the higher income the degree holder earns by virtue of having the degree, would be distributed to the spouses based on how much (or little) contribution the non-degree spouse had in helping obtain the degree.
Over time courts have seen that valuing a degree or license in this manner is unwise for many reasons. The legislature has now amended the Domestic Relations Law (DRL) to prohibit courts from considering the value of a spouse’s enhanced earning capacity arising from a license, degree, celebrity goodwill, or career enhancement as marital property subject to equitable distribution.
However, the Legislature still maintains that in arriving at an equitable division of marital property, the courts, shall consider the direct or indirect contributions, to the development during the marriage of the enhanced earning capacity of the other spouse.