Illinois Divorce Cases Involving a Professional Practice 

 Posted on September 16,2022 in Asset Division

When a divorcing spouse is a doctor, accountant, attorney, or another professional with a private practice, this can heavily influence the property division process during divorce. A professional practice is often considered a marital asset, which means it would be subject to equitable distribution in a divorce. However, there are certain special considerations that must be taken into account when dividing a professional practice. It is important to seek legal counsel early on in the divorce to determine how best to protect your interests.

Spouses May Both Have a Right to a Portion of the Professional Practice’s Value

If a professional practice is considered marital property, both spouses may have a right to the value of the professional practice. This is likely to occur if the practice was opened during the marriage or if the non-owning spouse contributed to the development and growth of the practice. 

Professional practices that are considered marital property must be assessed and divided during property division, just like any other asset. Ideally, the spouses can work out an agreement regarding the division of marital assets and debts and avoid a contentious court trial.  The spouse who owns the professional practice may need to compensate the other spouse for his or her share of the practice with other marital assets. If the spouses are unable to reach a property division settlement, the court will step in and make a decision about how to equitably divide marital proeprty. 

Valuing a Professional Practice Can Be Complex 

Dividing a professional practice can be complex because it is not always easy to determine the value of the business. There are many factors that must be taken into account, such as the location of the business, the type of practice, the number of clients, and more. Goodwill must also be considered when appraising a professional practice. The value of the professional practice is not only determined by tangible assets, but also by intangible assets, including the owner's personal involvement in the business and the business's good reputation in the community. 

Business appraisers may be brought in to help value the professional practice in preparation for asset division. Once the value of the business has been determined, the spouses are in a better position to negotiate a reasonable division of marital assets during their divorce. 

Contact a DuPage Profesional Practice in Divorce Lawyer

If you or your spouse own a private practice, you need a divorce attorney with the skills and experience needed to handle this complicated situation. Our Naperville divorce attorneys will work tirelessly to protect your interests and help you obtain the best possible outcome in your divorce. Call us today at 630-364-4046 to schedule a free consultation.

Source:

https://www.unm.edu/~parkman/Goodwill.PDF