Is a Professional License Considered Marital Property in a New York Divorce?

White Plains Divorce Lawyers Explain the Answer

At our law firm, Proto, Sachs & Brown, LLP, located in White Plains, Westchester County, New York, our White Plains divorce lawyers are often confronted with total surprise from their divorce clients when they are told that a professional license, such as a medical license or a license to practice law, may be considered " marital property" in a New York divorce.

In New York, marital property is defined as any and all property that was acquired during the marriage by either or both spouses. Once property is classified as marital property it is then subject to New York's Equitable Distribution Law which means that the court must distribute the marital property to each spouse in a manner that the court feels if "equitable" or fair. Of note is the fact that equitable distribution does not mean even, 50/50 distribution, but rather refers to a fair distribution after the court considers the totality of the circumstances of the marriage.

A Professional License as Marital Property in a New York Divorce

In 1985, in a case named O'Brien v. O'Brien, 66 NY2d 576, the Court of Appeals, New York's highest court, held that a license to practice a profession that is acquired during marriage and before the execution of separation agreement or the commencement of a divorce action, is marital property and thus subject to Equitable Distribution. In so holding, the Court reasoned that while a professional license does not fit within a traditional view of property because it cannot be sold or transferred and thus has no market value, it is nevertheless marital property because the professional license itself is an asset derived from the spouses' economic partnership. As the Court stated:

"Working spouses are often required to contribute substantial income as wage earners, sacrifice their own educational or career goals and opportunities for child rearing, perform the bulk of household duties and responsibilities and forego the acquisition of marital assets that could have been accumulated if the professional spouse had been employed rather than occupied within the study and training necessary to obtain a professional license."

In 1995, in a case named McSparron v. McSparron, 87 NY2d 275, the Court of Appeals further reasoned that including professional licenses as distributable marital property is appropriate to assure that the non-titled spouse receives an equitable share of the license to which the non-titled spouse contributed.

Most notably, New York is currently the only state in the country that has adopted this position regarding professional licenses.

White Plains Divorce Lawyer and Professional Licenses

In light of the fact that professional licenses acquired during the marriage are considered marital property, and in light of the fact that valuation of the professional license can be very difficult, we encourage you to call one of the White Plains divorce lawyers at our firm in Westchester County, NY to discuss this issue during a FREE DIVORCE CONSULATION. Please contact us online or by calling us at (914) 840-5104.