Valuing A Masters Degree In The MArital Assets

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Latest post 05-22-2009 8:15 AM by Drew. 4 replies.
  • 05-20-2009 3:12 AM

    • gandman1
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    Valuing A Masters Degree In The MArital Assets

    I got a Masters Degree while working full time.  My wife also worked full time while I was going to school.  The cost of the degree was covered by my employer.  The only out of pocket cost was for books (~$1,900) fees (~ $200) and tax’s (~$300), as Clinton cut off the exemption for Graduate Tuition Reimbursement taxability.

    I did change careers after getting the degree, but a portion of my previous career experience applied to my new career path.  The degree was not required to get the position or to maintain it. 

    I am getting divorced in NY State.  Can my ex obtain any value on her side of the balance sheet for this degree?

  • 05-21-2009 12:01 PM In reply to

    Re: Valuing A Masters Degree In The MArital Assets

    I'm not in NY.  She can probably try.  Degrees are usually looked at in terms of reimbursement to the marital community because of expenses paid, or future recovery because of spousal support and increased future income.

    For the former, looks like the marriage lost $2,400.  Big deal.  She probably spent that on stuff that she is claiming as her own property, right?

    For the latter, if spousal support isn't on the table, not sure I'd be worrying about this too awful much.

  • 05-21-2009 12:23 PM In reply to

    • Drew
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    Re: Valuing A Masters Degree In The MArital Assets

    Laymans take:

     

    Degree in what?

    If you mean an MBA--that was because some bright students out of Carnegie went to tax court Pro Se  and IRS beat them because they used business logic not tax logic  on an old sore point where a Harvard MBA beat IRS and wrote off Harvard MBA. 

     

    Anyhow.

     

    An MBA or whatever is NOT a license or qualifier like an MD,JD,CPA, RN, pilots license, or plumbers license  ---- to any specific practice of anything ---and it would be rather difficult to attribute taxable value to same. (Yes, I've seen some ROI tables of before and after MBA --I'd advise you not to open that can of worms!)

    The practical application is that if you were previously earning say 50,000 and now with your MBA or whatever you earn 75,000 then for any child support or alimony issues the salary you have is 75,000

    If you want logic puzzles --try somebody with a MD who doesn't like medicine per se and goes back to get an MGA and takes a whopper compensation cut to enter some area of public service

    in some places the arguement that she paid to put you thru school gets some traction--but I don't see it in your example as you were working full time and the tuition in large part seems to be an employee benefit.

     



  • 05-22-2009 2:53 AM In reply to

    • gandman1
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    Re: Valuing A Masters Degree In The MArital Assets

    The degree I received was an MBA.  I received a $4,200 increase in salary and changed careers’ after completion of the MBA.  My job does not have a prerequisite for an MBA or other advanced degree to perform it.  Many of my peers do not have one.  (Estimate ~ 35% do have an advance degree.)

    My biggest concern is that an actuary will project my future earnings based on the addition of an MBA, and she will receive 50% of that.  I would be put up against other MBA holders via actuarial tables who most likely have to have the degree in order to hold their position.  As such their future earnings would be tied in part to their degree. 

    I do not think it is equitable, because my experience is what is earning me raises not my MBA.  Further, the experience accrues after the divorce, so why should she be entitled to an award of the value obtained based on continuing experience in my new career field?

    Would like to hear from a NY State based Attorney, as NY does have some precedence cases for valuing degrees.  Although the majority are tied to JD’s MD’s etc.  There was one case that involved a teaching certificate however, but again the advanced degree was required to obtain the permanent certification document.

    I do not think it is right, because my experience is what is earning me raises not my MBA.  Further, the experiece accrues after the dicorce, so why should she be entitled to an award of the value obtained based on continueing experience in my new career field?

  • 05-22-2009 8:15 AM In reply to

    • Drew
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    Re: Valuing A Masters Degree In The MArital Assets

    Laymans take:

    I think you are over concerned about an MBA as having a value per se.

     

    The other cases you mention are degrees related to a specific job wich requires same.

    And my guess is at least some of the cases involve one went to school and the other went to work and helped pay for it.

    Tax logic is not divorce logic.

    I fail to see what an actuary has to do with it- The fact that you changed jobs and now earn 4,000 more probably has little to do with having an MBA---and as you put it the decided majority of peers in your firm do not hold an MBA--would be helpful to check if the recruting requirement or position description did not have some blurb like MBA highly desirable ...

    If lets say the typical job change in your area is for 10% or 6000 then it would be very hard to say that in your case the MBA was the cause of your salary increase if most folks did as well if not better without one?

    Is your STBX yapping off about the value of you MBA?  Don't add fuel to the fire!

    Sure, the folks who market MBA's like to focus on the value added --but a good amount of that is for marketing. A while back I crunched a few numbers on Americas 400 richest--turns out the folks w/o degrees were slightly richer than the folks with degrees!

    Personally I think you unwise to not use legal counsel. Legal counsel should have a much better idea of whats likely to count in your state.

    I'm not sure if an MBA having a discernable value to be divided under equitable distribution  is any more rational than if spouse  paid to enhance her career  via cosmetic surgery or dental surgery ?



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