Is a Degree Considered Marital Property in a Divorce?
In a divorce in Wisconsin, could a degree or education be considered an asset? Is it marital property? Attorney Rob Keenan of Sterling Law Offices explains how the landmark case DeWitt v. DeWitt sets the precedent for how the court rules on the value of a degree earned during a marriage when it comes to deciding on property division.
Wisconsin is a community property state; we put a value to all property and then divided it equally between the two spouses. One of the most complex parts of any divorce is the division of property.
Later, if it is deemed appropriate, additional maintenance (formerly alimony) might be awarded on top of that. However, consider this: maybe one spouse has earned a specialized degree or worked while the other went to school with the intent of going to school themselves later. Earning that degree is expensive, and many see it as an investment.
In a divorce, could a degree or education be considered an asset? Is it property? A 1980 Wisconsin divorce case (DeWitt v. DeWitt) helped decide this issue definitively for the state of Wisconsin.
To understand the final decision, we must understand some context about the case. The husband attended school full-time, earning his law degree while the wife worked several jobs to support them. He also worked part-time while he earned his degree.
According to the wife, the couple had agreed that it made financial sense for the husband to earn his degree first so that she could then go to school and finish her education after he entered the workforce. The husband denied that this agreement was explicit.
Because their divorce occurred before the wife was able to return to school, she argued that her husband's law degree should be considered part of the property division. In her view, because of their arrangement, she helped him achieve a higher earning potential at the expense of deferring her education or career.
Informal understandings of this nature are not exactly uncommon. One spouse may work full time so another can pursue their passion, a degree, or take on additional responsibilities at home.
The core issue here, however, was whether or not a college or vocational degree itself is valued as part of the divorce. The short answer: no, it cannot.
In this particular case, the court initially agreed with the wife's argument and awarded a lopsided cash settlement with no alimony (maintenance). This ruling was later appealed and reversed. The court ultimately decided that the original judgment made too many assumptions – assumptions that could not be proven or accurately evaluated.
A degree is not a factor in property division because it is not something that has a distinct dollar value. A degree cannot be inherited, and we can not directly connect it to the success of one's career. Because the marital property is considered anything obtained or paid into after the marriage, it might seem like paying tuition is an investment of source, but the courts do not consider that to be the case.
Does that mean we can never take a degree into account during a divorce?
Anecdotally, one could go back and forth on whether a degree is directly responsible for someone's ability to earn a higher salary. You might argue that your spouse earning their degree first while you worked stopped you from earning as much as you could. Unfortunately, that is all speculation – and the courts cannot make a judgment based on speculation.
If through those circumstances, the other spouse ends up earning a much higher salary, that would be considered during a divorce. In that case, it is not the degree, but the spouse's career that is being considered when deciding spousal maintenance.
Additionally, if one spouse was contributing a significant amount of income to the other's tuition, this is also something that can and should be considered during a divorce.
At this point, we may feel a little confused. Property division is a complicated process and has a lot of nuances. The simple answer to whether an educational degree is considered property is no, but it does not mean it will not factor in at all. When in doubt, it is always best to consult a family law professional.
Case Law Friday is a Sterling series focused on communicating in layman's terms cases of precedent, statutes that guide decisions, and court procedures important to getting results in family law.
We hope these deep-dive conversations create clarity, enabling you to better understand the rules that govern how decisions get made in family court.