Dividing a Medical Practice in a Divorce
Most divorces will include the division of property, assets, and debts between the spouses. In many cases, this is a simple task. In other cases, such as when one spouse owns a medical practice, the division proves more challenging. Medical practices of doctors, dentists, chiropractors, and mental health professionals often take decades to build and are likely one of the largest assets of the marriage. Knowing your rights regarding the division of medical practices can help you understand your options and the amounts to which you may be entitled.
Determination of Value
The first step must be to determine the value of the medical practice. This valuation can become incredibly complex financially, as it includes both tangible and intangible parts and components of the practice. In many cases, a valuation expert is needed to testify regarding how each part is valued within the established community, as well as determine the actual valuation of physical property, equipment, and intellectual property. Other intangible valuations such as the goodwill established by the business and the appreciation of the business during the time of the marriage will likely need an expert to determine.
When Did the Medical Practice Start?
When the medical practice was established is crucial to the determination of how to divide it as an asset within the divorce. If the medical practice began prior to the marriage, or even prior to the spouses’ meeting, there may be a chance that the court will not consider it a marital asset and give it entirely to the medical practitioner. In other cases, the medical practice may be specifically eliminated from being considered a marital asset due to a valid prenuptial agreement signed by both parties.
However, without a prenuptial agreement addressing the medical practice, or proving the medical practice began prior to the marriage, there is a strong likelihood that the court will determine that it is a marital asset. Visiting with an experienced divorce attorney can help you understand how to value and divide this financial asset.
Open for Business
After the court makes a decision regarding the final valuation of the medical practice, there is still another consideration. If the court determines that the medical practice as an asset should be divided between both spouses, there are options for the medical practitioner spouse to keep their medical practice open.
The first way to keep a medical practice open is through the “buy-out” of the other spouse, which requires the medical practitioner spouse to pay the other spouse in cash or other assets the amount owed. This will allow the medical practice to remain open for business, and the medical practitioner to continue to earn a living. However, if the spouse that is a medical professional simply does not have the cash to buy out the other spouse, other creative solutions may be found including dividing the equity in the marital home differently or creating payment options.
Let Us Help You Today
If you or spouse owns a medical practice and are considering divorce, contact the experienced Fort Lauderdale family attorneys at the offices of Joyce A. Julian, P.A. at 954-467-6656 or visit us online to schedule a free consultation to discuss your legal rights regarding your children today.