During the marriage, the husband pursued and completed a Master of Business Administration (MBA) degree. The wife worked and contributed financially and otherwise to the household while the husband attended school, with the shared expectation that his degree would enhance the couple's long-term economic prospects. When the marriage dissolved shortly after completion of the degree, the couple had accumulated few tangible assets. The wife asked the court to treat the husband's MBA as marital property and to assign it an economic value for purposes of division. The trial court declined, concluding that an educational degree was not "property" subject to division under Colorado's Uniform Dissolution of Marriage Act. The Colorado Court of Appeals disagreed and deemed the degree a divisible marital asset. The Colorado Supreme Court granted review to resolve the proper legal characterization of an educational degree obtained during marriage.
Does an educational degree (here, an MBA) earned by one spouse during marriage constitute marital property subject to valuation and equitable distribution upon divorce?
Under Colorado's Uniform Dissolution of Marriage Act, marital property consists of property acquired by either spouse during the marriage, subject to statutory exclusions. To qualify as "property" for equitable division, an interest must be an asset with exchangeable, transferable, or marketable value or otherwise be susceptible to ownership, valuation, and division. An educational degree or the corresponding increase in earning capacity is not property within this meaning. Contributions by a spouse to the other spouse's education may be considered in awarding maintenance or in the equitable division of actual, existing marital assets, but the degree itself is not a divisible asset.
No. An educational degree obtained during marriage, including an MBA, is not marital property subject to equitable distribution. The Supreme Court reversed the Court of Appeals and reinstated the trial court's determination.
The court began by analyzing the statutory framework for equitable distribution, emphasizing that only "property" acquired during marriage is subject to division. It reasoned that property, even when intangible, must have recognizable attributes of an asset—such as transferability, marketability, assignability, or an exchange value—and must be capable of ownership separate from the person. An educational degree lacks these characteristics. It cannot be sold, transferred, pledged, or inherited; it terminates upon the holder's death; and it is inseparable from the individual's personal skills and future choices. Any attempt to value a degree would therefore rest on speculative projections about future earnings, career paths, health, market conditions, and personal decisions rather than on a presently existing, severable property interest. The court distinguished the degree from divisible intangible assets (e.g., contract rights, vested pensions, or business goodwill) because those interests can be valued based on existing legal entitlements or market data and are, at least to some extent, alienable or enforceable. By contrast, a degree represents potential earning capacity—an expectancy based on human capital, not a property right. Treating a degree as property would both distort the statutory scheme and risk imposing an indirect, long-term obligation tied to future earnings in the guise of property division. Addressing fairness concerns raised by the supporting spouse, the court pointed to statutory tools better suited to redress inequity: trial courts may consider one spouse's contributions to the other's education when dividing actual, existing marital property and when awarding maintenance (alimony). These remedies can account for the supporting spouse's sacrifices without fictionalizing the degree as property and without forcing courts to place speculative present values on inherently personal, non-transferable attributes.
Graham is a leading case rejecting the classification of educational degrees as marital property. It shaped the majority rule in many jurisdictions and stands in contrast to minority approaches (e.g., New York's O'Brien) that treat licenses or degrees as divisible assets. The case is doctrinally important for clarifying the definition of "property" under equitable distribution statutes and practically important for channeling fairness concerns into maintenance, reimbursement, or distribution of actual assets, rather than speculative valuations of human capital. For students, Graham provides a template for analyzing asset characterization and the limits of judicial valuation in domestic relations.
In re Marriage of Graham draws a clear boundary between human capital and property in the equitable distribution context. By holding that an MBA degree is not marital property, the court grounded asset division in tangible or legally enforceable interests and avoided speculative valuations of personal earning capacity.