What Happened to Enhanced Earnings? How New York Divorce Law Changed for Professionals After 2016

For decades, professionals going through divorce in New York faced a legal and financial challenge: not only were their real assets subject to division, like homes, investments, and business interests, but so was the value of their future earning potential.

That changed in 2016. And if you are a licensed professional, business executive, or high-income spouse in New York, understanding how enhanced earnings are treated today is important when navigating a divorce.

Here is what you need to know.

What Are Enhanced Earnings?

Enhanced earnings refer to the increase in income potential that results from acquiring a professional license, advanced degree, or special status—like board certification or celebrity goodwill—during a marriage.

In the past, New York courts treated this increased income potential as a marital asset. If one spouse earned a medical, law, or dental license during the marriage, the other could be awarded a financial share of the projected future earnings tied to that license, even if it could not be sold or transferred like a business or house.

What Changed in 2016?

In a major shift, New York amended its Domestic Relations Law in 2016 to eliminate enhanced earnings capacity from the list of distributable marital property. That means:

The actual license, degree, or credential is no longer assigned a dollar value as a standalone asset.
The projected future income that the license may generate can no longer be carved out and divided in isolation.

This change ended a long-standing but controversial practice of assigning monetary value to intangible, non-transferable professional credentials.

So What Happens Now?

While courts cannot divide the value of a license or degree directly, they can and do still account for the role a spouse played in its acquisition. The law now directs courts to consider those contributions in determining the overall equitable distribution of marital property.

That means if your spouse supported you, financially or otherwise, while you were earning your license or building a practice, that support may still matter.

Here are a few examples:

If your spouse paid the household bills while you completed your MBA or law degree…
If your spouse stayed home with your children so you could build your professional practice…
If your spouse worked a second job so you could attend medical school…

…then courts may adjust the division of other marital assets in your spouse’s favor, even if the degree or license itself cannot be valued and split.

What This Means for Business Owners and Professionals

If you are a professional or business owner with a degree or license earned during the marriage, the 2016 law works to your advantage—at least in theory. You no longer face the risk of having future income speculatively valued and divided as a distinct asset.

However, that doesn’t mean you are off the hook. The court may still award your spouse:

A larger portion of real assets (e.g., home equity, business interest, retirement accounts); and/or
Ongoing spousal maintenance, especially if your earning power significantly exceeds your spouse’s.

This new approach puts more focus on the overall picture of marital contributions, rather than just the asset tied to the license.

Key Takeaways for High-Income and Professional Clients

Enhanced earnings are no longer considered marital property in New York—but contributions to your enhanced earnings still are.
Documentation matters: If your spouse supported your career, that support should be quantified and clearly understood.
Strategic planning and valuation remain important: Especially in cases involving businesses, practices, or investment portfolios built around professional work.
Tailored litigation strategy can protect your future—or help you claim what you fairly contributed to.

How We Help

At The Glennon Law Firm, P.C., we represent professionals, executives, and business owners across New York in divorces involving large and/or complex assets. We understand the intricacies of New York’s post-2016 enhanced earnings rules and know how to protect your position, or build a strong claim for your fair share.

You may learn more about the nuances of divorce involving businesses or other assets by visiting these pages:

We can help you in Albany, Buffalo, Rochester, New York City, and everywhere in between.

You may learn more about us and how we operate by visiting these pages: About Us and What Sets Us Apart.

To learn more about these topics, check out our Legalities & Realities® Podcast and other related blog posts:

This blog post is for informational purposes only and does not constitute legal advice. For specific legal counsel, please contact our office directly.