Building a life together often involves supporting each other’s dreams. For some couples, this includes building a business together, such as a medical practice. Understanding how this jointly built asset is treated under the law is crucial when facing divorce.
Community property laws play a big role in divorce
Community property laws dictate that most assets acquired during marriage belong to both spouses equally. This includes businesses like medical practices. If one spouse started or grew a medical practice while married, both might have a claim to its value.
Key points to consider
Several factors can influence the fate of a medical practice in divorce:
- The date of establishment of the practice
- The growth and value increase during the marriage
- The contributions of the non-physician spouse to the practice
- The practice’s current market value
- The existing prenuptial or postnuptial agreements
One of the first steps in addressing a medical practice during divorce is determining its value. This often requires the experience of a professional business valuator who understands the unique aspects of medical practices. The valuation process takes into account both tangible assets, like equipment and real estate, and intangible assets, such as goodwill and patient lists.
For the physician spouse, maintaining control of the practice is often a top priority. This might involve negotiating with their soon-to-be ex-spouse to keep the practice intact in exchange for other assets or future payments.
It is important to note that legal intricacies can overwhelm anyone. Consulting an attorney specializing in divorce and business law is essential.