Fairly dividing marital property is a challenge in all high-asset divorces. However, if your spouse owns a medical practice, dental practice, law practice or accounting practice, making sure you receive your fair share is essential.
Here are four things you need to know to protect your financial interests during divorce:
- The fair market value of the business - An Avvo article on business valuations in Washington points out that hiring a professional business appraiser is typically a very wise choice. Such an appraiser can provide an accurate estimate of the practice's value based on its accounts payable reports, annual tax returns and other financial information.
- The value of the practice's goodwill - A business's goodwill in the community is an intangible asset, yet one that can be quite valuable. Such goodwill may include the reputation of the professional practice, the loyal customer base, etc.
- The value of the professional degree - If your spouse is just beginning a promising professional career, his or her degree (M.D., J.D., CPA, etc.) may have value that could potentially be subject to equitable division in divorce.
- Your contribution to the practice - One of the most important considerations when dividing the value of a professional practice is your own tangible and intangible contributions. Perhaps you worked while your spouse went to law school or medical school. Perhaps you volunteered to act as unofficial accountant or secretary while the business got off the ground. Perhaps you sacrificed your own career to stay home with the children while your spouse pursued his or her dreams. These kinds of contributions should all be taken into account. They may warrant financial compensation of some kind.
Valuing and dividing professional practices during divorce is a complex yet essential process. To fully protect your fair share of all the marital assets, including your spouse's business, consult a Washington attorney skilled in this particular area of family law.