While the Grahams were married, she worked and he went
school getting an MBA.
Just after graduation they filed for divorce and headed to
Court to split up their assets.
Mrs. Graham requested no alimony as part of the
settlement.
The Trial Court found that Mr. Graham's MBA was, as a
matter of law, jointly owned property to which Mrs. Graham had a property
right. Mr. Graham appealed.
The Trial Court estimated that the MBA was worth $82k,
and awarded Mrs. Graham $33k.
The Appellate Court reversed. Mrs. Graham appealed.
The Appellate Court found that an education is not a property.
However, Mr. Graham's increased earnings potential was a factor to be
considered when determining alimony and/or property division.
The Colorado Supreme Court affirmed the Appellate Court
The Colorado Supreme Court looked to the definition of property
and found that an education has none of the traditional characteristics
of property.
For example, it can't be sold, transferred or inherited.
He does have the 'right to use', which is one of the
sticks in the bundle of property rights sticks.
An MBA is more of an achievement that may potentially
assist in the future acquisition of property.
The Court found that Mrs. Graham should properly use Mr. Graham's MBA
as a factor in determining alimony, not as a direct property to be divided.
In a dissent, it was argued that the MBA was the only
thing of value that the couple had. It was also argued that if they had
stayed together longer, Mrs. Graham would certainly be entitled to a
percentage of the property that was bought with Mr. Graham's increased
earnings.
There were several things Mrs. Graham could have done
differently:
Pre-nuptual agreement.
She could have made Mr. Graham take out a loan during the
wedding, instead of paying for it directly. That way, after a divorce,
he'd remain liable to pay the loan.
Other courts have agreed with the idea that education
isn't property, but used the reasoning that it is too speculative to
value, as opposed to the reasoning used in this case.
New Jersey Courts invented the concept of reimbursement
alimony. It allows people in situations like this to get reimbursed
for their contribution to their spouse.
New York Courts have found that a degree is
property and should be factored into the property division.
