Equitable Distribution: Protecting Professional Practices in Divorce

 Posted on February 09, 2016 in Division of Property

If you are a doctor, an attorney, an accountant, a therapist, or any other type of professional that typically works within an individual or group professional practice, you need to consider how your earnings from this practice and interest in it may be divided between you and your spouse during your divorce. Working at a professional practice is not the same as working for an employer, nor is it necessarily the same as working as an independent contractor. You are running a business, either on your own or with partners.

It is important that you work with a divorce attorney who has experience handling such professionals' divorces to ensure that your interests in your practice are protected. Keep the following in mind as you enter a relationship with your attorney and begin the process of dissolving your marriage.

Your Practice Is a Marital Asset

Unless you have a prenuptial agreement in place that states that your professional practice or place within one may not be divided in a divorce, your share of the professional practice is subject to Illinois' equitable distribution laws for property division. This means that the court will examine how the money earned through the practice is spent in your household and the contribution that you and your spouse both make to it. Your spouse's contribution does not necessarily have to mean he or she works at the practice as well – if he or she took on less-demanding work to allow you to devote yourself fully to the practice, this may be considered.

A Practice Is a Business

This means it is subject to business valuation through one of the methods typically employed by the court to find business' values. If you work as part of a group, determining your share of the practice could potentially be more complicated. Talk to your attorney about how your individual investment in your professional practice can affect how it is divided in your divorce.

What If My Spouse and I Work Together?

It is not uncommon for spouses who are in the same professional field to work together. If you and your spouse worked at the professional practice together, the same valuation techniques and division rules used when only one spouse works at a professional practice are applicable during a divorce. Talk to your attorney about special considerations that might have to be made, such as if one spouse wants to leave the practice while the other remains, if both spouses want to remain at the practice, or if your positions at the practice were significantly different, such as a doctor and a receptionist.

Work with a Kane County Divorce Attorney

At our firm, we understand the specific concerns that come with owning or being part of a professional practice. During the divorce process, you need to think like a business owner and work with an attorney who will help you protect your business interests. Contact our firm today to schedule your legal consultation with one of the Kane County divorce attorneys on our team.

Source:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000