Dividing a Medical Practice During Divorce
If you are in the process of a divorce,
or considering divorce, one of the largest issues you will face with your
spouse is the equitable distribution of your assets. If one of you owns any
type of medical practice, the division of this asset can prove legally
challenging. If you or your spouse owns a doctor’s office, dentist’s office,
chiropractor’s office or any other kind of medical office, you should take time
to seriously consider the options regarding what is likely to be the largest
asset within your divorce.
Medical
Practice Valuation
First, the medical practice is likely one
spouse’s livelihood. There are even cases in which the medical practice is
owned and operated by both spouses. In either case, the first step must always
be to hire a financial expert to provide an independent valuation of the medical practice.
As with any business, a valuation will include both tangible and intangible
assets and components of the business. While property, equipment, materials and
supplies are all valued, so is the intellectual property and goodwill the
business has established in the community over the years it has been in
business. A valuation expert will be able to take all financial records and
inventory of assets and make a determination regarding an overall value of the
medical practice at the current time.
Open
for Business
In most cases, the medical practice is
the sole source of income for one spouse. Therefore, in most cases, that spouse
wants to keep the medical practice open for business not only during the
divorce, but for many more years to come. Therefore, following the valuation of the medical practice,
a decision will need to be made by the spouse who has the medical practice. A
complete accounting of all assets and debts of the marriage will be made, and
the court will make a determination regarding how much of the business should
be equitably distributed to both spouses.
While the owner of the medical practice
could sell it and divide the assets accordingly, the likelihood again is that
he or she will want to keep the medical practice open. Therefore, one spouse
will need to “buy-out” the other spouse and pay the amount determined in the
financial calculations. If the spouse with the medical practice is unable to
buy-out the other spouse completely at the time of the divorce, creative
arrangements can be made, including a payment arrangement.
Contact
a Divorce Attorney
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