The Valuation of an Educational Degree at Divorce

59 Pages Posted: 3 Feb 2013

Date Written: January 1, 1983

Abstract

This article focuses on the problem of the valuation of an educational degree at divorce. Educational degrees present two problems: Is the educational degree a marital property asset subject to division at divorce, and if so, how can or should such a degree be valued? There has been much argument concerning the property issue, without satisfactory results. In fact, modern courts recognize many intangibles as property, although their characteristics are not materially different from an educational degree. As will be discussed, an educational degree should also be recognized as property.

An exclusive focus on the property issue, however, ignores the knotty problem of valuation. Many courts have anguished over the first issue, only to dismiss the difficult valuation problem without much analysis. The valuation of an educational degree is unlike the valuation of wrongful death awards or professional goodwill. Although some courts have estimated the degree to be worth the present value of the attributable income stream, such a calculation is unrealistic in view of the many variables involved. Ultimately, any attempt to value the worth of an educational degree deteriorates into speculation largely influenced by the widely varying testimony of competing economic experts.

A fair solution to this problem must enable the supporting spouse to share in the degree’s value if it was earned during the marriage with the expectation that it would provide mutual benefits. Yet the remedy must also avoid a harsh penalty that compels the student spouse to relinquish the just rewards of hard work and ambition. In addition, an equitable award must apply consistently to marriages of varying durations, as well as to degrees that vary greatly in the extent to which they increase future earnings. Finally, a fair settlement must be workable, so that courts can apply it with relative ease and preferably without the need to use expensive economic experts whose fees in the divorce context are unjustified.

The first section of this article examines some current remedies and will demonstrate that awards in the past have depended more on the facts of the case than on the law. This case-by-case relief creates unacceptable inconsistencies between long and short duration marriages. The next section will discuss the property issue and its confused disposition by various courts. The third section focuses on the valuation problem and reviews attempted valuations by the courts, as well as other proposed methods of valuation. The currently applied valuation methods and proposed formulas are all problematic and should be avoided. The article concludes with a proposed remedy for recompense to the supporting spouse based on a labor theory of value. This proposed remedy combines the virtues of fairness and workability.

Keywords: Divorce, educational degree, valuation, property valuation, labor theory of value, family law, domestic relations

Suggested Citation

Mullenix, Linda S., The Valuation of an Educational Degree at Divorce (January 1, 1983). Loyola of Los Angeles Law Review, Vol. 16, p. 277, 1983; U of Texas Law, Public Law Research Paper No. 315. Available at SSRN: https://ssrn.com/abstract=2210705

Linda S. Mullenix (Contact Author)

University of Texas School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States
512-232-1375 (Phone)

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