How Do You Value a Professional License or Advanced Degree Earned During Marriage?

In New Jersey, you do not value it because a professional license or advanced degree is not property that gets divided in a divorce. The state Supreme Court settled that question in Mahoney v. Mahoney in 1982. What a supporting spouse can receive instead is reimbursement alimony, which pays back the actual money they put toward their spouse’s education. The practice built on that license is a separate question, and that one often does get divided.

That distinction decides a lot of money. Here is how it works.

Is a Professional License or Degree Marital Property in New Jersey?

No. A degree belongs to the person who earned it. It cannot be sold, transferred, or passed to anyone else, and what it will eventually be worth depends on choices the graduate has not made yet.

On that reasoning, the New Jersey Supreme Court held in Mahoney v. Mahoney that an MBA earned during the marriage was not property subject to equitable distribution. Two companion cases decided around the same time applied the same rule to a medical degree and a dental license. A Seton Hall Law Review analysis walks through all three decisions.

The practical reason is simple. Valuing a degree would mean guessing at decades of future earnings, career changes, health, and market shifts. Courts declined to build awards on that much speculation.

New Jersey still divides everything else the couple built under equitable distribution rules at N.J.S.A. 2A:34-23.1. The degree simply never enters that pool.

What Is Reimbursement Alimony?

Reimbursement alimony is New Jersey’s answer for the spouse who worked while the other studied. It is written into N.J.S.A. 2A:34-23(e), which allows an award where one spouse supported the other through an advanced education while expecting to share in the earnings that education would produce.

It covers real financial contributions, including:

• Tuition, books, and school fees
• Household and living expenses carried while the student spouse was in school
• School-related travel costs
• Other direct support that made the degree possible

One detail catches people off guard. Under the statute, an award of reimbursement alimony cannot be modified for any reason. Most alimony can be revisited when circumstances shift. This type is fixed once it is entered, so getting the number right the first time matters.

How Is Reimbursement Alimony Calculated?

It is based on what you actually contributed, not on what the degree turned out to be worth. A spouse who paid $60,000 toward tuition and living costs is arguing about that $60,000, not about a percentage of a surgeon’s future income.

That makes documentation the whole game. Pull together:

• Tax returns from the school years
• Bank and credit card records showing who paid what
• Tuition bills, loan records, and receipts
• Pay stubs showing your income while you carried the household

Without records, the claim turns into a memory contest. With them, it becomes arithmetic.

What About the Practice Built With That License?

Here the answer flips. A law practice, medical or dental office, or consulting firm started or grown during the marriage is a marital asset, and its goodwill counts as property.

In Dugan v. Dugan, the New Jersey Supreme Court held that goodwill in a professional practice is subject to equitable distribution. Goodwill is the value of a reputation strong enough to keep clients coming back. The court drew a clean line: goodwill does not exist the moment someone earns qualifications and a license. It is built afterward, through years of performance and client relationships.

So in a typical case:

• The license or degree itself is not divisible
• The practice built with it, including goodwill, is divisible
• Raw earning capacity is not divisible, though it does shape alimony

Valuing a practice usually calls for a forensic accountant, much like the process described in our guide to how New Jersey values businesses in divorce.

What If the Marriage Lasted Decades?

Reimbursement alimony was built for shorter marriages, where one spouse funded a degree and the couple split before the payoff arrived. In Mahoney itself, the marriage ran roughly seven years.

In a long marriage where the couple accumulated real assets, the Court suggested a different approach: address any unfairness through the division of the assets themselves, weighing each spouse’s circumstances and earning capacity, rather than through a reimbursement check.

That is why a spouse in a 25-year marriage to a physician usually does better focusing on the alimony factors at N.J.S.A. 2A:34-23(b), which include each party’s earning capacity and educational level, plus their financial and non-financial contributions to the marriage. Our post on alimony exposure for high earners covers how those factors get weighed.

Frequently Asked Questions

Can I get half my spouse’s medical degree in a New Jersey divorce?

No. New Jersey does not treat a degree or license as divisible property. You may qualify for reimbursement alimony covering what you contributed toward the education, and you still share in the marital assets.

How much reimbursement alimony can I receive?

It reflects your documented financial contributions to the education and household during school, not a share of future earnings. Records determine the amount.

Can reimbursement alimony be changed later?

No. The statute states that a reimbursement alimony award is not modifiable for any reason, which makes the original calculation important.

Is my spouse’s dental practice divisible even though the license is not?

Yes. The practice and its goodwill are marital property if built or grown during the marriage. A valuation professional determines the value.

Do I need to prove I sacrificed my own career?

Not for reimbursement alimony, which focuses on financial support you provided. Career sacrifice is relevant to other alimony types and to equitable distribution.

Talk Through Your Options Before You Settle

If you supported a spouse through school, or you are the one who earned the degree, the numbers turn on documentation and on separating the license from the practice.

The Netsquire team helps New Jersey couples sort out education claims, practice valuations, and alimony without a drawn-out court battle. Reach out for a free consultation and we will walk you through where you stand.