Professional Licenses, Degrees, and Credentials in Michigan Divorce

What Engineers, Physicians, and Other Professionals Need to Know

You spent years in medical school, residency, or engineering graduate programs. Your spouse supported you through countless late nights, exam stress, and financial strain. Now you’re facing divorce, and a troubling question emerges: Can your medical license, engineering PE certification, or advanced degree be considered a marital asset subject to division?

For high-earning professionals in Michigan, this issue represents one of the most complex and consequential aspects of divorce proceedings. Understanding how Michigan courts treat professional credentials can mean the difference between a fair settlement and a financially devastating outcome.

The Foundation: Michigan’s Approach to Professional Credentials

Unlike some states that treat professional licenses and degrees as divisible marital property, Michigan courts have taken a more nuanced approach. The Michigan Court of Appeals has consistently held that professional licenses and degrees are not themselves marital property that can be divided like a house or retirement account.

The landmark case establishing this principle is Woodworth v. Woodworth (1983), where the court declined to treat a husband’s MBA as marital property subject to division. The reasoning was straightforward: a professional degree or license cannot be assigned, sold, transferred, or inherited. It has no exchange value and terminates upon the holder’s death or incapacity.

However—and this is critical—this does not mean that the supporting spouse leaves the marriage empty-handed.

What This Really Means for Professionals

If you’re a physician with a medical license, an engineer with a PE certification, or any professional with advanced credentials earned during marriage, you should understand three key principles:

1. Your License Isn’t Divisible, But Its Value Matters

While your spouse cannot receive a portion of your medical license or engineering certification directly, Michigan courts recognize that these credentials have significantly enhanced your earning capacity. This enhanced earning capacity becomes highly relevant in two critical areas:

Property Division: Courts may award the supporting spouse a larger share of other marital assets to account for the sacrifices they made while you obtained your credentials. If your spouse worked full-time while you completed medical school, effectively subsidizing your education, the court may grant them a disproportionate share of the marital estate.

Spousal Support: Your increased earning potential resulting from professional credentials plays a substantial role in determining alimony. A neurosurgeon or senior engineer earning $300,000 annually can expect significantly different spousal support obligations than someone earning $60,000, particularly when their spouse’s contributions enabled that career trajectory.

2. The “Reimbursement Alimony” Concept

Michigan courts have developed what’s sometimes called “reimbursement alimony” specifically for situations where one spouse supported the other through professional education. This isn’t a formal legal category, but rather describes alimony awarded to compensate a supporting spouse for their investment in the other’s career development.

Consider this scenario: Sarah worked as a nurse to support her husband David through medical school and residency. David is now an orthopedic surgeon earning $450,000 annually. Sarah reduced her own career advancement opportunities during these critical years. While David’s medical license isn’t divisible, the court will consider:

• The duration of support Sarah provided
• The financial contributions she made
• Career opportunities she sacrificed
• The enhanced standard of living David’s credentials now provide
• The disparity in earning capacity between the spouses

The resulting spousal support award may be substantial and long-term, effectively recognizing Sarah’s investment in David’s professional development.

3. Timing Matters Enormously

When you obtained your credentials is crucial. Credentials earned entirely before marriage remain separate property. Those earned entirely after divorce are not subject to consideration in property division. The critical period is credentials obtained during the marriage or separation period.

But the analysis goes deeper. If you started medical school before marriage but completed it during marriage with your spouse’s support, courts will examine the specific contributions made. Similarly, if you obtained a professional license years ago but recently completed a lucrative fellowship or specialized certification during marriage, that enhanced earning capacity may be considered.

Practical Implications for Different Professionals

Medical Professionals

Physicians face unique challenges in divorce proceedings. Medical education is among the longest and most expensive professional training paths. If you completed medical school, residency, and fellowship during marriage while your spouse worked or delayed their own career, expect these factors to significantly impact your divorce settlement.

Additionally, practice goodwill—the value of your patient base, reputation, and established practice—may be considered marital property if developed during marriage. A successful private practice is more than just your medical license; it’s a business asset that may require professional valuation.

Engineers and Technical Professionals

Professional Engineers (PEs) and those with advanced technical certifications face similar issues. While a PE license itself isn’t divisible, if your spouse supported you through graduate school or while you accumulated the experience required for licensure, courts will consider this investment.

Engineers working in specialized fields (aerospace, petroleum, semiconductor design) may have earning capacity significantly exceeding general engineers. This differential—especially if the specialization was achieved during marriage—becomes relevant in spousal support determinations.

Academic and Research Professionals

If you earned a Ph.D. during marriage and now work in research or academia, remember that while academic positions typically pay less than private sector roles, tenure and research funding can represent significant value. Courts understand that a tenured professorship at a major university, while not providing income equivalent to private practice medicine, represents substantial job security and benefits.

The Supporting Spouse’s Perspective

If you supported your spouse through professional school or training, you have legitimate claims that courts recognize:

• Document Everything: Maintain records of your financial contributions, career sacrifices, and support provided. Did you work full-time while your spouse studied? Did you relocate for their residency or first job, disrupting your own career? Did you handle all household and childcare responsibilities to allow them to focus on their education?
• Calculate the Investment: Determine the actual financial investment you made. This includes not just direct educational expenses you paid, but also lost opportunity costs. If you delayed your own graduate education or turned down promotions requiring relocation, quantify these sacrifices.

Understand Your Rights: You may be entitled to:

• A larger share of marital assets
• Substantial spousal support, potentially long-term
• Consideration of your reduced earning capacity due to career sacrifices
• Recognition of the non-financial support you provided
• Strategic Considerations for Divorce Planning

For the Credentialed Professional

• Timing of Divorce Filing: If you’re contemplating divorce while in training (residency, fellowship, etc.), understand that your current lower income will be used for initial support calculations, but courts will also consider your imminent increased earning capacity.
• Practice Valuation: If you own a practice or partnership interest, obtain a professional business valuation early. The methodology used (asset-based, income-based, or market-based) can significantly impact the determined value.
• Separate vs. Marital Contributions: Clearly establish what credentials and career developments occurred before marriage, during marriage, and with what level of spousal support. This documentation becomes crucial in negotiations and litigation.
• Future Earning Potential: Be prepared for extensive discovery regarding your earning capacity. Your actual current income may be less important than what the court determines you could earn with your credentials.

For the Supporting Spouse

• Establish Your Contributions: Create a detailed narrative of your support. Financial contributions are easy to document, but don’t overlook non-financial support: childcare, household management, emotional support during stressful training periods, and career sacrifices.
• Understand Earning Capacity Analysis: Courts may impute income to the professional spouse based on their credentials, not just their current earnings. A physician choosing to work part-time or in a lower-paying specialty may still have support obligations based on full-time earning potential in their field.
• Long-term Planning: Especially if you sacrificed your own career development, negotiate for sufficient spousal support to allow you to retrain or advance your own career post-divorce.

Common Misconceptions and Pitfalls

Misconception #1: “I Earned My Degree Before We Got Married, So It Doesn’t Matter”
While a degree earned entirely before marriage won’t be considered a marital asset, any debt incurred for that education that was paid with marital funds may be relevant. Additionally, career advancement and specializations developed during marriage absolutely matter.

Misconception #2: “My Spouse Didn’t Directly Pay My Tuition, So They Have No Claim”
Support takes many forms. Working full-time while you studied, managing household responsibilities, providing childcare, or simply foregoing their own educational or career opportunities all constitute support that courts will consider.

Misconception #3: “Prenuptial Agreements Don’t Cover Professional Credentials”
While prenuptial agreements typically focus on pre-marital assets, they absolutely can address how future professional development and enhanced earning capacity will be treated in divorce. For professionals entering marriage before completing their education, this is crucial.

Misconception #4: “I Can Just Take a Lower-Paying Job to Reduce Support Obligations”
Courts can impute income based on your earning capacity, not just actual earnings. If you’re a board-certified surgeon working at a community clinic earning $120,000 when similar surgeons earn $400,000+, the court may calculate support based on the higher figure.

Tax Implications Professionals Must Consider

The Tax Cuts and Jobs Act of 2017 fundamentally changed the taxation of spousal support. For divorces finalized after December 31, 2018:

• Alimony is no longer tax-deductible for the paying spouse
• Alimony is not taxable income for the receiving spouse

For high-earning professionals, this represents a significant change. Previously, paying $100,000 in alimony might reduce your tax liability by $37,000 (at the top federal rate). Now, you pay the full $100,000 with no deduction.

This has made lump-sum property settlements relatively more attractive than ongoing spousal support for some high earners. However, this requires having sufficient liquid assets to provide a meaningful lump sum—which not all professionals possess early in their careers.

When Professional Credentials Meet Other Complex Assets

High-earning professionals often accumulate other complex assets that complicate divorce proceedings:

• Restricted Stock and Options: Many engineers and researchers at technology companies receive significant equity compensation with vesting schedules. Unvested options acquired during marriage may be considered marital property.
• Deferred Compensation: Physicians in hospital systems or large medical groups often have complex deferred compensation arrangements. These must be carefully analyzed and valued.
• Partnership Interests: If you’re a partner in a medical practice, law firm, or engineering consultancy, your partnership interest is likely a significant marital asset requiring professional valuation.
• Intellectual Property: For research scientists and engineers, patents or trade secrets developed during marriage may have significant value.

Protecting Your Interests: Action Steps

Before Marriage

• Consider a prenuptial agreement, especially if you’ll be completing professional education during marriage
• Clearly understand and document any educational debt you’re bringing into the marriage
• Discuss expectations about mutual career support

During Marriage

• Keep clear records of who pays for educational expenses
• Maintain documentation of career sacrifices made by either spouse
• Avoid commingling educational debt with marital assets unnecessarily

During Divorce Proceedings

• Engage both a skilled family law attorney and, if necessary, a forensic accountant
• Obtain professional valuations of any practice or business interests
• Be prepared for detailed financial discovery regarding earning capacity
• Consider whether mediation might allow for more creative solutions than litigation

Michigan Professionals Need A Professional Divorce Attorney

While Michigan law doesn’t treat your medical license, engineering certification, or graduate degree as divisible property, courts have sophisticated methods for ensuring that supporting spouses receive fair compensation for their investment in your professional development. The enhanced earning capacity these credentials provide will significantly impact property division and spousal support determinations.

For professionals facing divorce, understanding these principles early allows for better strategic planning and more realistic expectations. For supporting spouses, knowing your rights ensures you receive fair compensation for the sacrifices you made.

Whether you’re a physician finishing residency, a mid-career engineer with a PE license, or any professional whose credentials were developed during marriage, the intersection of professional development and divorce law deserves careful attention from experienced counsel.

Get Expert Guidance

Professional credential issues in divorce require attorneys who understand both family law and the unique aspects of professional careers. At The Mitten Law Firm, we’ve helped numerous professionals navigate these complex issues, protecting their interests while ensuring fair outcomes.

If you’re a professional facing divorce or if you supported a spouse through professional education, contact The Mitten Law Firm today for a free consultation. We’ll help you understand how Michigan law applies to your specific situation and develop a strategy to protect your financial future.