Are Courts Changing How Professional Licenses Are Valued in Property Divisions?

New York follows an equitable distribution method of dividing marital property when couples get divorced. This means a judge considers the totality of a couple’s situation, including the types and extent of marital property, each spouse’s separate property (if any), future earning potentials and a variety of other factors. Marital property is divided fairly, or equitably, between spouses.

Marital property generally includes any property obtained during the marriage, including:

  • Real estate
  • Vehicles
  • Retirement accounts
  • Business interests
  • Advanced degrees and licenses

Courts generally treat licenses as marital property if the license was obtained during the marriage and the non-licensed spouse contributed to its achievement. Because professional licenses represent enhanced future earnings potential, they are among the most hotly contested assets in divorces. Spouses frequently present evidence to courts to prove the value of professional licenses and if they should be considered marital property.

Of course, you can’t literally divide a professional license, but courts are tasked with determining how much the license is worth and counting the value on the license-holder’s side of a property division.

A shift in the valuation of professional licenses

While New York courts traditionally have maintained a strong tendency to find an equal or near-equal division of marital property to be equitable, a new trend is emerging about how courts divide the value of professional degrees and licenses.

Recent court decisions indicate judges are more inclined to assign a greater percentage of the value to the license-holding spouse, with awards ranging between zero and 35 percent of the value to the non-licensed spouse. The rationale is that the non-licensed spouse’s share of the license value should be aligned with his or her contribution to its achievement.

Attorney Lauren B. Abramson has 25 years of experience helping spouses protect assets and pursue a fair distribution of marital property throughout Westchester and Putnam counties and the surrounding area.  By: Lauren B. Abramson

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