Dividing Professional Practices In A Florida Divorce
The division of assets is among the most contentious issues in a Florida divorce. For couples who’ve had a successful life and have managed to accumulate many assets, the division of assets can be even more complicated. Also, when complex assets are involved, the division of assets usually gets more complicated. A professional practice, such as medical, financial, or legal services office, is an example of an asset that can complicate the division of assets. In a divorce case involving a professional practice, one spouse, the professional, will want to safeguard and retain their practice. It is common for a professional to worry that their divorce will damage or destroy their practice and want to protect and keep their practice. You should contact a qualified divorce attorney for help if this is your situation.
How Are Professional Practices Divided in a Florida Divorce?
If you have a professional practice, for example, if you are a doctor and are about to go through a Florida divorce, you should know that a professional license is not considered marital property. The Court cannot divide or take your license during your divorce. However, when it comes to the practice, it may be considered marital property and thus subject to equitable distribution.
If your spouse makes a claim against your professional practice, the Court will first need to characterize the practice as marital or non-marital property. Generally, whether a professional practice is considered marital or non-marital property depends on whether it was started during or before the marriage and if it was started before the marriage, whether it grew during the marriage.
If you started your professional practice before the marriage and it remained at approximately the same level throughout your marriage, it will likely be categorized as non-marital property. However, suppose you started your professional practice before marriage and the practice increased during the marriage because of marital efforts or funds. In such a case, the increase in the practice’s value will likely be considered marital property. And, if the professional practice was started during the marriage, it will generally be regarded as a marital asset.
Once a professional practice is characterized as marital property, the Court will then appraise the practice or the increase in its value. The Court will do this with the help of an expert. It is crucial that you retain an attorney who can work with the expert to ensure there is a proper valuation of the practice.
You need to note that, as it pertains to a professional practice, the practice’s tangible assets, such as equipment and furniture, are not the only assets that must be considered during valuation. The Court must also consider what is called “goodwill”, which comprises enterprise goodwill and personal goodwill. However, the courts have held that personal goodwill is not a marital asset subject to equitable distribution as it is the professional’s future earning capacity. Only enterprise goodwill is considered marital property subject to equitable distribution.
Contact a Fort Lauderdale Divorce Attorney at Joyce A. Julian
Any divorce can be complex, but matters can get more complicated if a professional practice is involved. The Fort Lauderdale divorce attorneys at Joyce A. Julian, P.A. can work to make sure your professional practice is properly defined and protected.