In Re Marriage of Aufmuth
1979 Cal. App. LEXIS 1395, 152 Cal. Rptr. 668, 89 Cal. App. 3d 446 (1979)
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Rule of Law:
A professional education acquired during a marriage is not considered community property subject to valuation and division upon dissolution. When a residence is purchased with both separate and community funds, the property interests are apportioned pro rata based on the percentage of the purchase price each source contributed.
Facts:
- Marcia Aufmuth and Lawrence Aufmuth were married on August 19, 1967, while Lawrence was a law student.
- Marcia worked as a teacher until 1969, and the couple took out a student loan to finance Lawrence's final year of law school.
- In 1971, the couple purchased a family residence for $66,500, making a $16,500 down payment using Marcia's separate funds from a trust.
- The remaining $50,000 of the purchase price was financed with a real estate loan, with payments made from community earnings.
- In January 1974, Lawrence became a 5 percent shareholder in a corporate law firm.
- The parties separated on September 1, 1975, and had two children.
Procedural Posture:
- The parties initiated a marriage dissolution proceeding in a California superior court (trial court).
- The trial court entered an interlocutory judgment of dissolution, which found that the husband's legal education was not a community asset but the student loan was a community debt.
- The trial court also ruled that the wife held a separate property interest in the family residence equal to her down payment, with the remainder being community property, and it apportioned the appreciation accordingly.
- Marcia Aufmuth (wife), as appellant, appealed from the judgment to the California Court of Appeal.
- Lawrence Aufmuth (husband), as cross-appellant, also appealed from portions of the judgment.
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Issue:
Is a professional education acquired by one spouse during a marriage a divisible community asset upon dissolution?
Opinions:
Majority - McGuire, J.
No, a professional education acquired during a marriage is not a community asset subject to valuation and division. The word 'property,' as used in community property statutes, does not encompass every right acquired during marriage, such as the right to practice a profession. The court reasoned that a legal education's value lies in potential future earning capacity, which is post-dissolution separate property. Ascribing a community value to the degree would improperly require a division of post-marital earnings. The court, citing Todd v. Todd, affirmed that while the tangible assets produced by the education are community property, and the enhanced earning capacity is a factor in determining spousal support, the education itself cannot be valued and divided as an asset. The court also affirmed the trial court's apportionment of the family home, holding that since the separate and community contributions to the purchase price were traceable, each retained its character, and the appreciation should be divided in proportion to those original contributions.
Analysis:
This decision solidifies the legal principle in California that a professional degree or license is not a divisible community property asset. It distinguishes between the intangible potential for future earnings and the tangible community property that is accumulated as a result of those earnings. This case establishes that a non-student spouse's contributions are to be recognized through the division of acquired assets and spousal support, rather than by assigning an ownership interest in the other spouse's earning capacity. The ruling prevents the complex and speculative valuation of a professional education and avoids entangling post-divorce separate property earnings with the community property division.
