Q&A: Determining the "value" of your medical degree during divorce proceedings

April 3, 2009

I am in the process of a divorce, and one of the issues that has arisen is the value of my medical degree and my "enhanced" earnings as a result of it. How would such a valuation be calculated?

Q: I am in the process of a divorce, and one of the issues that has arisen is the value of my medical degree and my "enhanced" earnings as a result of it. How would such a valuation be calculated?

A: From a practice valuation perspective, your degree's worth is reflected in your income using the income approach to valuation. This is done by applying a ratio to the income available above the amount that would be earned from your labor if you were an employee-i.e., the "dividends" to ownership. The degree is of no value other than its ability to generate income. It's the income-or the ability to generate income-that counts, not so much how you got there. If the question pertains to state laws in regard to your spouse helping you get your degree to attain the income, or personal vs. professional goodwill, you should consult with an attorney in your state.