Brief Fact Summary.
A couple was married for six years. During that time, the husband completed medical school. Upon divorce, he argued that his future earning capacity as a doctor should not be a factor in the division of marital property or awarding alimony.
Synopsis of Rule of Law.
When one spouse has helped to subsidize the other’s education during their marriage, she may be awarded a share in his future earning capacity upon divorce.
Thomas and Diana Francis married soon after Thomas was admitted to medical school. They were married for six years, during which time Thomas received his medical degree. While he was in school, Diana earned $5000 a year from an in-home day care. The family otherwise lived on a $45,000 student loan. Upon divorce, an expert for Mrs. Francis determined that Dr. Francis’ enhanced earnings were due to 30% capital investment in his education and 70% his labor in his studies. Since Mrs. Francis had contributed half of the capital investment, she was entitled to 15% of his enhanced earnings, valued at $121,279. The court awarded her a $100,000 lump sum property award and three years of rehabilitative alimony. Dr. Francis appealed, arguing that his medical education was not an asset to be divided and that the calculations were speculative and misleading.
Is a spouse entitled to a share of the other spouse’s enhanced earning capacity upon divorce if she helped to subsidize his education during the marriage?
(Neuman, J.) Yes. When one spouse has helped to subsidize the other’s education during their marriage, she may be awarded a share in his future earning capacity upon divorce. The degree is not an asset to be divided as property, but the enhanced earning capacity that comes from the degree should be taken into account when distributing assets in divorce. Reimbursement alimony is the best way to compensate Mrs. Francis for her economic sacrifices during the marriage. Future earning capacity should be considered in the same way that the loss of anticipated support is considered in other alimony awards. The calculations were not in error, as Mrs. Francis is not limited just to repayment of her out-of-pocket expenses for Dr. Francis’ education. The rehabilitative alimony will be slightly reduced but will still enable her to enroll in a training program. Affirmed as modified.
Some commentators do not find a financial analysis like the one done in Francis appropriate because marriages are not entered into as investments in order to earn a return. As a purely financial matter, Dr. Francis would have been better off refusing his wife’s $5000 a year and instead borrowing from another source. The repayment with interest would have equaled far less than the $100,000 awarded here.