By: Steven Sheinwald and Jennifer A. Kirschenbaum

Have you ever heard, “what’s mine is mine and what’s yours is mine?” Well if not, and you have a professional license the time has come to be wary of the implications of divorce as our country continues to dispel the notion that “marriage is forever” ¹. Physicians must be cognizant that their professional license to practice medicine is, in fact, marital property in the State of New York subject to division (at least economically) in the event of divorce.

Medical License as Marital Property

Currently, only two states consider a professional degree or license to be “marital property”, which upon the dissolution of a marriage would be divisible as property between the parties: New York State² and Michigan³. The remaining states have recognized a medical license to represent the “potential for significant future earnings, which cannot be assigned, sold, transferred, conveyed or pledged.”⁴ While this doesn’t mean physicians should leave the Big Apple and move elsewhere, because, in fact, other US State Courts have alternative remedies which the courts frequently award in lieu of basing the distribution on division of a professional degree.⁵ As well there are steps that can be taken to protect this asset in the event of divorce (i.e., prenuptial agreements)

In New York, your medical license as marital property means that if you were to seek a legal separation in New York State your medical license would be corralled into your assets that could be split between you and your spouse. New York does not make obtaining a divorce easy. Before you can seek any sort of legal separation (e.g., divorce, annulment, or declaration nullifying a marriage) in the New York courts you must meet the jurisdictional requirements, meaning that.

• you were married in New York and lived here for the one (1) year prior to deciding to legally separate; or

• you and your spouse lived in New York together and have lived in New York for at least one (1) year prior to seeking legal separation; or

• the reason why you are separating happened here (i.e., someone cheated here) and at least one spouse has lived here for at least one (1) year prior to seeking legal separation; or

• both of you live here and the reason why you are seeking legal separation happened here; or

• either you or your spouse has lived here for at least two (2) years immediately preceding seeking legal separation.⁶

Protecting Yourself: Pre and Postnuptial Agreements

Talking about prenuptial agreements and postnuptial agreements may be a difficult subject to broach with your future or current spouse; however, failing to address this issue may leave you with a license that is encumbered should your marriage come to an end. The benefits of executing a pre or postnuptial agreement are, among others, (1) protecting and defining what is your personal property that you have brought to the marriage individually, including your medical license; (2) reducing conflicts and saving money if you do divorce; (3) clarifying special agreements between you and your spouse; (4) establish procedures and ground rules for deciding future matters; and most importantly (5) affording you the opportunity to discuss any of the aforementioned while you and your spouse are on good terms.

While pre and postnuptial agreements generally have a negative stigma, you should consider them as a way of communicating with your future/current spouse about your financial situation, which may, in fact, strengthen your relationship by helping to build trust and honesty. So long as the resulting agreement that you and your spouse execute contains terms that are objectively fair to both parties, most courts uphold the terms of the agreement.⁷

Conclusion

The aforementioned information has been provided for an overview and for educational purposes only and does not constitute legal advice. Should you require additional information regarding your license, pre or postnuptial agreements, or marital issues please do not hesitate to contact Kirschenbaum & Kirschenbaum, P.C., at (516) 747-6700. Our firm focuses on the needs of the healthcare professional and we offer our clients expertise in the areas of matrimonial law, asset protection and estate planning as well as the traditional health care law practice areas common to firms specializing in this field.

Steven Sheinwald, Esq., is a partner at Kirschenbaum & Kirschenbaum, P.C., specializing in matrimonial law and custody disputes. Please feel free to contact Steven with any questions at (516) 747-6700 or SSheinwald@kirschenbaumesq.com.

Jennifer Kirschenbaum, Esq., is a healthcare associate at Kirschenbaum & Kirschenbaum, P.C., specializing in managed care disputes, physician practice formation and structuring and general practice issues. Please feel free to contact Jennifer with any questions at (516) 747-6700 or Jennifer@kirschenbaumesq.com.