The New Enhanced Earning Capacity Rule

Rincker Law Family/Matrimonial Law 1 Comment

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The new spousal maintenance law signed into law by Andrew Cuomo at the end of September changes the concept of enhanced earning capacity in terms of looking at as an asset subject to equitable distribution.  In the previous law, if a party earned a license or professional degree during the marriage, it was considered an asset to be divided when a divorce occurred.  The court was required to award a certain percentage of the lifetime value of that license or degree to the non-titled spouse for the contributions he or she made toward the titled spouse’s attainment of that license or degree.

The new maintenance law eliminates that degree or license as a separate asset to be distributed during the equitable distribution.  Rather, it allows for the degree or license to be considered as a factor in making a determination of post-divorce maintenance and equitable distribution.

Let’s take for example, a married couple where one spouse received a medical degree during the marriage.  Under the old law, when the couple divorced, the lifetime value of the medical degree would have to be determined and then the spouse who does not have the degree would be entitled to a percentage of that degree.  The spouse who did not get the medical degree is entitled to a percentage because of his or her contributions that allowed the other spouse to be able to attain that medical degree.

Under the new law, the other spouse is no longer entitled to a percentage of the lifetime value of the degree.  Rather, the degree is now a factor in determining how much money will be paid in post-divorce maintenance or how property will be divided in terms of equitable distribution.  For example, the spouse without the medical degree may be given more property or other assets to account for the earning capacity that the doctor spouse has because of his medical degree.  On the other hand, the doctor spouse may be entitled to receive less post-divorce maintenance because of his medical degree and ability to provide for himself.

This new law regarding enhanced earning capacity goes into effect January 25, 2016.  Additionally, it will only apply to new cases that are commenced on or after the effective date.  Rincker Law, PLLC is prepared to help in guiding you through the workings of the new enhanced capacity law.

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Comments 1

  1. I live Ohio I’ve Been married 28yrs. My husband is an aronutical engineer at WPAFB. He is in a supervisory position pay and NH-04. He asked me years ago to leave my marketing career that might achieve his masters degree and pursue his career full time for us. With 2 children I agreed.

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