Property Division Issues Involving Professional Practices
Accurate professional practice valuation for divorce property division purposes can be difficult, and standard business valuation methods might not fit your circumstances particularly well. First of all, the physical assets owned by your practice probably represent only a small fraction of the value of your business. Even if you’re a physician or dentist with expensive equipment, there’s a good chance that your capital assets serve as collateral on an operating loan.
To learn how experienced family law attorneys approach this problem across a range of situations, contact Brodie & Friedman, P.A. in Boca Raton. Our divorce lawyers work with licensed professionals from many fields — medicine, accounting, real estate, insurance and law. When our professional clients work in partnerships or sole practices, the value of their interest in the practice can be considered to be part of the marital estate.
Sound Advice About Business Valuation for Professionals
Most of the value of a small professional practice lies in its goodwill, or those intangibles that reflect the premium over the book value of your assets. Repeat business, client confidence and professional standing all contribute to your goodwill, and these can’t be divided as marital property.
Nevertheless, there are different ways to approach a professional practice valuation, and the one that works best for you will probably depend on whether the practice is your own or your spouse’s.
Professional practices can also be affected by prenuptial agreements, alimony issues or agreements defining or restricting transfer rights within a partnership or closely held corporation. The ultimate question in the valuation of professional practices is the amount — if any — that the professional will need to pay his or her spouse to buy out the marital interest in the practice.
Contact our licensed professional practices attorney today
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