A common question when divorce or legal separation is being contemplated is whether a professional license or college degree can somehow be split among the parties. This question is particularly common when one spouse worked to enable the other spouse to go to college or to obtain an advanced degree. While neither a degree nor a license is property subject to division, under California law, the marital community may be entitled to reimbursements for payments made toward education or training. Of course, no reimbursement will be ordered if the parties agreed in writing, such as in a prenuptial agreement, that none would be made.
Several issues are presented when one of the parties to a marriage receives education or training during the marriage or when the couple pays back student loans during the marriage, including the following:
- Whether the community should be reimbursed for the use of community funds;
- How any outstanding loan should be allocated; and
- What the impact of the education or training should be on spousal support.
The first issue is whether the community has a claim of reimbursement from the spouse or partner who received the training or education. If educational expenses were paid out of community funds, reimbursement, with interest, will be ordered if the education “substantially enhances the earning capacity of the party”. If circumstances would render reimbursement unjust, it may be reduced or modified. Those circumstances include the following:
- When the marital community has substantially benefitted from the education;
- When the other party also received education or training using community funds, which offsets the education in question; and
- When the need for a spousal support award is substantially reduced because the education or training enhanced the party’s ability to “engage in gainful employment”.
The second issue is how any unpaid student loans will be allocated. Generally, the law provides that outstanding loans shall not be classified as community debt but shall be allocated to the party who received the education or training. Of course, to the extent this is done, it may offset a portion of the community’s right to reimbursement. See our separate blog here for a general discussion of community debt.
The final issue is the extent to which a spousal or partner support award should be impacted by the additional education or training. The California Family Code provides that several factors are considered in rendering such an award. These include each party’s earning capacity, as well as the extent to which one party contributed to the education or training of the other. An experienced family attorney will recognize these implications to the attainment of a degree or license and will position her client favorably in obtaining a support award.As you might imagine, how these matters are presented to a court can make a significant difference in both the issue of reimbursements and in a spousal or partner support order. Judy L. Burger has the experience you need to identify and present issues in family court. Contact her today at (415) 259-6636 to learn more.