Is Enhanced Earning Capacity Dead In New York Divorce Cases?

For many years NY was the only state left in the country that valued and equitably distributed in divorce cases enhanced earning capacity ("EEC"). In concept the idea was that if a spouse obtained, during the marriage, a license, degree, a career or other item of similar value, that a report could be prepared by a forensic accountant to determine how much, if at all, a person's ability to earn was increased as a result thereof.

The application of this concept was problematic for many reasons because it relied upon a speculative look into the future as to what a person will earn over the remainder of their career until retirement, assumption about taxes and raises and more importantly an assumption of long term successful employment. The reason for EEC initially was to protect the non-licensed spouse who supported, whether financially or otherwise, their marriage partner while the EEC was being obtained. Support took many forms from financial support (the other parent worked while the EEC parent went to school), paying for schooling, taking care of children in the home and taking on other family responsibilities. The idea was so that the non-degreed spouse would not be left behind after the EEC parent reached the finish line of education or career growth.

EEC became even more complicated because there was a direct affect on maintenance awards if EEC was distributed. So attorneys had to examine which route was better. If you received EEC then there was less income available to calculate maintenance to avoid "double dipping".

In any event, the new law in New York which will apply to EEC will take affect on January 26, 2016. Previously filed cases will not directly be affected. I suspect that there may be some extra divorce filings between now and then if EEC is a potential issue in the case. However, keep in mind that most judges award only between 10% to 20% of the EEC valuation and in the face of the new legislation, possibly less.