Medical Practice Included When Doctors Divorce

Medical Practice Included When Doctors DivorceDoctors as a profession are statistically less likely to be involved in a divorce. They have demanding workloads that can strain a marriage, but a successful doctor is often financially stable, which helps a marriage. When a doctor does divorce, their practice is part of the division of marital properties. Valuing a professional practice is different than other businesses and requires financial professionals who are familiar with these practices.

Practice as Property

Your medical practice is marital property if you started it after your marriage. If your practice predates your marriage, you must include its increase in value since your marriage as part of your marital property. Unlike with other types of businesses, your spouse does not have the option of owning part of your practice unless they are also a doctor in the same practice. This static ownership means that you will need to compensate your spouse with other marital properties. Your student debt from medical school is marital debt if it was accrued during your marriage. You may be able to offer to assume sole responsibility for the debt as compensation for your medical practice.

Valuing a Practice

A medical practice shares many of the factors used in determining the value of other businesses, such as revenues, physical assets, and growth potential. Two factors of particular concern when valuing a medical practice are:

  • Whether it is a group practice; and
  • How much value comes from your personal goodwill.

You may own only a portion of your medical practice if you are in a group practice with other doctors. After assessing the value of your practice, you must calculate what percentage of the practice you own to determine how much of that value is marital property. Unfortunately, you need to notify your practice partners about your divorce in case the practice becomes involved in legal matters.

The success of a medical practice often depends on the reputation of the doctor. This is an example of personal goodwill, which is not a marital asset in Illinois. Your personal reputation increases the value of the practice and would transfer if you opened a new practice. Enterprise goodwill is a marital asset in Illinois, meaning that it can be included in your practice’s value. Enterprise goodwill is the value attached to the practice, independent of yourself, such as being part of a well-regarded association.

Contact a Kane County Divorce Attorney

You have worked hard to build your practice and do not want your divorce to take time away from seeing patients. A St. Charles, Illinois, divorce lawyer at Goostree Law Group understands your professional needs and will handle most of your divorce workload. Schedule a free consultation by calling 630-584-4800.

Source:

http://www.onlinejacc.org/content/accj/73/4/521.full.pdf

Goostree Law Group

Goostree Law Group

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St. Charles, IL 60174

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Naperville IL 60563

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Wheaton, IL 60187

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Our Illinois divorce attorneys represent clients in Kane County, DuPage County, Kendall County and DeKalb County, including Geneva, Batavia, St.Charles, Wayne, Wasco, Elburn, Virgil, Lily Lake, Aurora, North Aurora, Elgin, South Elgin, Bartlett, Crystal Lake, Gilberts, Millcreek, Maple Park, Kaneville, LaFox, Yorkville, Oswego, Plano, Sugar Grove, Big Rock, Bristol, Newark, DeKalb, Sycamore, Naperville, Wheaton, West Chicago, Winfield, Warrenville, Downers Grove, Lombard, Oak Brook, Streamwood, Hoffman Estates, Barrington, South Barrington, Lake Barrington, Schaumburg, Big Grove, Boulder Hill, Bristol, Joliet, Kendall, Lisbon, Minooka, Montgomery, Plainfield, Sandwich, Yorkville and many other cities.

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