How Does a Professional Degree or Licenses Affect My Divorce?
Property and debt division during a divorce can be complicated, especially when assets without a clear value are involved, such as a professional license or degree. In Alabama, professional licenses and higher education degrees can be subject to division. Specifically, if the asset is considered marital property, the value of the license or degree can be split equitably between the divorcing couple.
If you are the party who earned the degree or license, you may be wondering why it is considered marital property. Marital property includes the assets you obtain during your marriage, and only a few assets are excluded, such as personal injury settlements or assets obtained through inheritance. While you did put in the work and effort to obtain the degree, you may have used marital funds to pay for the license or degree, and in other cases, your spouse may have supported you financially while you obtained the degree or license.
To protect your professional license or higher education degree, you should consider drafting a pre- or postnuptial agreement before you obtain the asset. You might also consider divorce mediation and filing uncontested so you can negotiate your property division settlement with your partner yourself. Otherwise, the division of the value of your professional license or degree will be left to the court.
Determining the Value of a Professional License
The economic value of a professional license or degree can hard to determine. In many cases, the court may consider what the person who has the degree or license earns in comparison to what they would earn without the degree or license. The court may also base the value on how much it cost the couple to obtain.
In making a property division determination, the court will consider the sacrifices and contributions of the non-licensed spouse made in support of the other spouse obtaining the license or degree. Once a value is determined, the court can award the non-licensed spouse with a higher percentage of marital property to compensate them for their share of the license.
Dividing Debt Related to a Professional License
Debt that has been accrued during your marriage is also subject to division. If either party has debt related to their professional degree or license (i.e. student loans, credit card debt, etc.), the debt is subject to division and will be divided equitably. The court will consider a variety of factors when determining debt division including:
- Each party’s tax burdens
- Each party’s income, assets, and separate debts
- Each party’s earning capabilities
- Who accumulated the debt
- Wasteful dissipation accusations
Let Us Help You with Complex Property Division Cases
At Shaw Family Law, our attorney has over two and half decades of legal experience. Known for treating our clients like family and providing aggressive and compassionate counsel, you can trust our firm to help you understand your legal rights and work to protect your interests. If you or your soon-to-be ex have a professional license that is subject to division, we can help you under the value of licenses and develop a case strategy to ensure the best possible case results.
To discuss your case with a member of our team, contact Shaw Family Law via phone (205) 259-7650 or our online contact form. You don’t have to face your divorce alone.