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Protecting a medical practice in a divorce

On Behalf of | Jun 1, 2023 | Divorce |

In a New Jersey divorce, asset division is one of the most frequent sources of disagreement. This is particularly true if one person has a valuable business. A medical practice certainly qualifies. Physicians should be vigilant about the risk to their practice as the divorce proceeds.

Know what questions to consider regarding a medical practice

The assessment of a property’s value is fundamental in a divorce case. A medical practice is an asset and will be appraised for its financial value. This is true whether the doctor has their own practice or is tied in with other medical professionals.

There are key questions that will be asked when determining its value. That includes the type of practice it is; whether it was established prior to the marriage or after the couple was married; its funding and what is owed; the structure of the agreement among the owners, and if an increase in value can come about after the divorce.

Determining a medical practice’s value differs greatly from the appraisal of a home, an automobile or household items. It is not as straightforward as an investment portfolio or a bank account. It might be necessary to seek the services of a forensic accountant with a history of gauging the value of professional practices.

The non-owning spouse cannot own part of the medical practice if they are not a physician, so being granted an ownership stake as part of the divorce settlement is not an option. Generally, each side is likely to have their own financial expert to give their opinion on the practice’s value. This is a situation during divorce that warrants full preparation beforehand.

Dividing a medical practice in a divorce has unique complexities

Building a medical practice is difficult and physicians understandably want to protect it. This is a worrisome problem in a divorce. Whether there is common ground for a negotiated financial settlement or it needs to go to court, it is imperative to be fully prepared to try and reach an acceptable resolution.

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