Does the cost of a law degree need to be paid back in a divorce?

Posted in Advanced Degrees,Appeals,California,Community Property,Family Code,Property Division on October 17, 2017

“A law degree is not a ticket to prosperity.”

In re Marriage of Graham, California Court of Appeal, Fourth Appellate District (2003)

Ratzer Family Law recently won a family law appeal brought after the divorce of our client and his former wife, who were married in 2009. During their 2016 divorce trial, the wife pointed out that the husband had gone to law school during the marriage.

The couple had paid for law school using community funds (funds that belonged to the couple), including a loan from the wife’s 401(k) account. She had partially repaid the loan using her own funds and the husband agreed to repay half of that partial repayment.

Late in the trial and on appeal, the wife argued that the husband should have to repay the full cost of his legal education to the community estate under California Family Code Section 2641, which calls for repayment when one party’s education “substantially enhances the earning capacity of the party.”

In other words, when a couple uses shared funds to pay for one spouse’s education, California law calls for reimbursement of the cost by the spouse who received the education — but only if that education increased the earning capacity of that spouse.

Unfortunately, that was not the case for this man. Before he went to law school, the husband was making around $65,000 a year as an electrician. After law school, despite working two unpaid internships and “hanging up a shingle,” he has so far been unable to make much profit as a lawyer. He has been unable to obtain a law firm job and continues to work full time as an electrician. He estimates he works around 28 hours a week on his legal business, but he nets only about $400 per month.

“[He] might find that what he can make [as an electrician] looks pretty good compared with trying to scratch out a living in the legal field,” wrote the appeals court, paraphrasing a previous appellate case called In re Marriage of Graham.

It’s true that the husband went to law school to increase his earning capacity. It’s also true that the law degree might someday enhance his earning capacity, but there is little cause in the record to predict that. Moreover, the wife provided little or no proof, such as the opinion of an expert witness, that the education will have that long-term effect.

In reality, getting a law degree doesn’t guarantee prosperity. Many lawyers struggle for long years before seeing any return on their educational investment, if they ever do. That’s why the California Family Code only requires reimbursement of past educational expenses when the evidence shows that education has substantially enhanced earning capacity.