Divorce affects many aspects of an individual’s life, their business not least of all. A person running a professional practice might understandably worry whether or not their marital split will affect their business and, ultimately, their own livelihood.
There are unique considerations to keep in mind around professional practices compared to other businesses during a divorce. Doctors, lawyers and other practicing professionals can approach their divorce from a more informed stance by understanding how their practice factors into property division.
How does divorce affect a professional practice?
Business ownership follows the same rules of community property and debt division as other assets in a divorce. A professional who starts their practice during their marriage may share equal ownership of the business with their spouse in the eyes of the divorce court. One necessary result of this equal ownership may be to liquidate the business entirely as a way of fairly and equitably distributing business assets to each spouse in a divorce.
What other aspects of a professional practice does divorce affect?
Not only might your spouse claim partial ownership of your professional practice as community property in your marriage, but they can also pursue the value of your education as part of property division as well. A professional’s education is an asset with observable value in regard to their practice. If a person’s spouse supports them during higher education in pursuit of a degree or license to practice, then that spouse might receive an additional share of assets equal to the value of their contributions to that education.
Protecting one’s practice is an absolute necessity for many professionals who go through a divorce. The best way to accomplish this is often by arriving at a mutually-agreeable separation agreement through mediation outside of court.