Safeguarding Your Professional License in a Divorce Scenario in NJ

Count on a Skilled Divorce Lawyer to Navigate Asset Division as Licensed Professional or their Spouse in Passaic County, New Jersey.

Divorce is most common for couples between the ages of 28 and 39. By that time, many individuals have productive, blooming careers. Some had to study extensively to obtain a professional license for their field, meaning the other person tended more to the home and children. Getting a professional license requires years of sacrifice and hard work. It is an expensive process that can take out a large chunk of the household’s budget or cause the family to incur more debt through loans or credit cards. Maybe Aunt Millie’s pearls were pawned, or Grandpa Jimmy’s Jaguar was put on the block at auction, but no matter how the money was acquired, it indicated significant sacrifice for the one getting the license and their spouse. But when there is a divorce, how is that sacrifice monetized? One spouse puts their career in a holding pattern, allowing the other to advance professionally. They left the workforce eight years ago and must start from the bottom when they return. New Jersey has a no-fault divorce, and the assets are divided according to equitable distribution, where a judge decides how the finances are divided based on what is most equitable for both parties, rather than splitting everything 50-50.

For high-asset divorces involving professional degrees, seek advice from an experienced New Jersey divorce attorney well-versed in business valuations and property distinctions. If you have concerns about the classification of professional degrees and what happens when a couples divorces in Montclair, North Bergen, Haledon, Woodland Park, South Orange, and across Passaic County, Hudson County, Newark, Bergen County, Essex County, and nearby areas in New Jersey, contact The Montanari Law Group to protect your interests by calling 973-233-4396.

Divorce Rules for Professionally Licensed Individuals in New Jersey

It is well known that the majority of positions in healthcare require a license to practice, such as doctors, nurses, dentists, radiologists, psychologists, acupuncturists, and psychiatrists. Lawyers, CPAs, teachers, school administrators, pilots, massage therapists, cosmetologists, funeral service workers, and architects also need licenses. New Jersey does not have a specific set of rules when handling divorce cases involving licensed professionals. A professional license does not have a specific dollar amount affixed to it and cannot be measured fiscally. It cannot be bought or sold, so placing a monetary value on it is impossible. Also, the future value of the license cannot be calculated. The degree’s value is reflected in vague factors such as the professional’s health, earnings, or market shifts, which are fluid and inconsistent. In other words, New Jersey does not consider a professional license a divisible asset for the purposes of divorce.  What can be measured is the earning capacity afforded the licensee. The value of the income generated by the licensed person and the opportunities forgone by the other spouse is used to quantify the license’s value in a way that can be distributed between the spouses.

Understanding the Perspective of the License Holder and their Counterpart

The spouse with the license may consider their contribution to the marriage greater due to the sacrifices of time, money, and energy incurred in obtaining their professional level. Exorbitant tuition costs, long hours of study and research, and poor eating and sleeping habits for years are all part of the experience that makes them feel their license and the fruits of their labor belong to them alone.

The other spouse feels that their contribution to academic costs, maintaining the household by working one or more jobs to keep the family afloat financially while managing all of the household duties, including taking care of children and putting their career growth opportunities on ice, all to the benefit of their spouse reaching their dreams. To have given up so much only to be getting a divorce can be earth-shattering and cause bitterness.

Addressing Professional Practices as Marital Assets in Divorce

If a spouse has a professional practice individually or forms part of a group practice, it can be considered a marital asset. An analyst working in tandem with a forensic accountant will approximate the monetary value of the practice and submit it to the court as part of the assets to be divided in the equitable distribution of marital property. This can be resolved in a myriad of ways:  the professional spouse buys out the other partner’s portion of the business, the business is sold, and the proceeds are divided as per the divorce settlement, or the professional spouse maintains the practice while paying the court-determined alimony and child support based on an equitable distribution of all assets and debts.

The Essential Function of Prenuptial Agreements in Distributing Assets

A prenuptial agreement predetermines what will be done with the marital assets in case of a divorce. It is used to identify what property belongs to either spouse or what is jointly owned. Moreover, a prenup can set the ground rules for future earnings and acquisitions. A prenuptial agreement defines when and under what conditions an asset purchased during the marriage is separate or shared property, thereby protecting assets from qualifying for equitable distribution.

Legal Ramifications for Licensed Professionals on Spousal and Child Support

Logically, the spouse who supported their partner in getting their degree or license and opening a practice or professional service will expect compensation. If the marriage barely outlived the academic completion of the licensee, reimbursement alimony is the most probable option. But if the marriage was longer, a monthly amount of alimony could be in order.

Reimbursement alimony pays one spouse for their financial contributions toward their spouse’s education or professional development. It can be assessed in combination with permanent or limited alimony. It is available for a spouse who worked to finance the education and training of their spouse in expectation of sharing the expected financial benefit afforded by an advancing career. Tuition costs, materials, books, computers, tools, and living costs during that time are usually considered.

There are many factors taken into account in the calculation of alimony. Some of them include whether there is a financial need for alimony if the other spouse has the financial means to pay alimony, the standard of living during the marriage, assets, the duration of the marriage, and each spouse’s earning or employability potential. Another critical point is whether there will be tax issues as alimony is taxable income, and its payment is tax deductible.

According to N.J.S.A.2A:17-56.41 to 56.52, licensed professionals paying child support are subject to the denial, suspension, or revocation of occupational or driver’s licenses if a child support agreement is violated. If the payor accumulates more than six months in arrears for support and healthcare coverage or ignores notices (subpoenas) from the court about a child support issue, a warrant can be sought for their arrest.

Choosing a Collaborative Divorce to Streamline the Process

Getting a divorce is stressful, costly, and time-consuming, especially when there are some sticking points you and your ex cannot agree on, no matter how hard you try. In a collaborative divorce, the goal is to work together and negotiate solutions that satisfy both parties. It is driven by outcomes, solutions, and the goals you and your ex set for your family.

Each of you hires a collaborative divorce attorney to get a collaborative divorce. They will confer and draw up a collaborative divorce agreement that says you agree to work the divorce out without going to court. They will create an agenda, listing the topics for discussion and if any specialists such as accountants or financial planners will be needed. The next is a meeting with the two of you and your lawyers. You begin to discuss each topic, making the decisions you feel are best for you and your family. When everything has been agreed on, you both sign the divorce agreement and send it to court for ratification.

Review Strategies to Secure Your Interests with a Professional License with Our Divorce Attorneys in Little Falls, NJ

No one ever gets married thinking they will eventually divorce. Sharing the financial burden of getting a degree and a license to practice in your field is part and parcel of marriage. But you need a seasoned divorce attorney to protect your interests when the relationship gets pear-shaped, and you are ready to end your marriage. It takes experienced professional attorneys, such as those in the Montanari Law Group, to make the divorce process as smooth as possible. All divorces require a certain amount of time and effort; this cannot be done in a week. But with the correct divorce attorney, you can ensure your assets, both now and in the future, are as safe as possible. Our firm has assisted clients with divorce cases in Fort Lee, Hoboken, Ridgewood, Wayne, Clifton, Prospect Park, Wayne, Jersey City, Hackensack, and nearby towns in Hudson, Bergen, Passaic, and Essex Counties. Contact us at (973) 233-4396 or complete our online contact form for a free initial consultation.