Are Degrees Property?

with Stephanie Ostreicher

Are Degree's Property? Transcript

Please note: The script may not be exactly what is spoken, but contains the same information as presented in the video.

An interesting issue that can arise in a family law matter is whether or not a professional degree or designation achieved by one spouse is a piece of property, in which the other spouse can claim an interest. For our discussion on this issue today, we will use the facts of the leading case on this issue Caratun v. Caratun, which is a decision of the Ontario Court of Appeal. In this case, Mr. Caratun married Mrs. Caratun primarily to allow him to immigrate to Canada, and obtain a dental degree so that he could practise here. Mrs. Caratun, presumably, entered the marriage out of love for her husband, and they believed that the marriage would be successful. Two days after obtaining his dental degree, Mr. Caratun separated from his wife. Mrs. Caratun had given up various opportunities to advance her own career in order to earn a steady income to put her husband through dental school, and stood to gain nothing in terms of Mr. Caratun’s dental degree.

Concerned about her financial situation, Mrs. Caratun sought to put a value on this dental degree, which she contributed to both tangibly and intangibly during the parties’ marriage. Mrs. Caratun wanted this degree to have a value for the purposes of the Equalization of Net Family Property, which is the equalizing of the net growth that each party experienced during the marriage in terms of assets. This would have provided Mrs. Caratun with a lump sum payment with which to start her single life.

The Ontario Court of Appeal stated that this degree was not considered, property, or an asset, for the purposes of equalizing the parties’ respective Net Family Properties. This is an interesting argument, and may seem unfair because of the result that it causes; being that Mrs. Caratun receives none of the benefit of this degree as property, despite her contributions to his ability to obtain same. The Court had difficulty with describing a degree as property for a variety of reasons. There was concern about characterizing a professional degree or license as property, as they really not nothing but allow the person holding the degree or license to work in a given field. It would be difficult to then distinguish why a professional degree or license was treated as property, while a person in a different field could earn a similar income after a similar amount of training and this would not have proprietary rights attributed to it. Essentially, the Judges worried that this would lead to every job being property to some degree.

The Judges also highlighted some concerns that a professional degree or license does not have many of the cornerstones of property. For example, a person cannot sell or transfer their degree or license. Also, they worried that a degree is really of no future value without the holder of it, and it would therefore be extremely difficult to value, if a value could be assigned to it at all. This would be extremely speculative, and may lead to unfairness.

Instead, the Court awarded spousal support to Mrs. Caratun on a compensatory basis, having regard for the fact that Mr. Caratun’s dental credentials provided him with the ability to earn a substantial income on an ongoing basis. To learn more about the specifics of spousal support, please visit our website. Spousal support, however, may not be a remedy that is available to everyone, and in those cases, it may not be fair to the spouse who put their partner through school to put no other value on a degree or license. Other critics of this decision have stated that we value people’s businesses, when they are sole proprietors or shareholders, by looking at the “goodwill” of the company, or the value that this person brings to the business by virtue of their skills and attributes. How is this any different than placing a value on a degree or license earned by an individual? This is a valid point, and a question to consider.

Despite these concerns, the current state of the law is that a degree or license is not property, but that the economic fallout of a situation like that of the Caratuns is dealt with via spousal support award.