Those who are solo practitioners, partners or shareholders in a professional practice are advised to rely on an attorney for their divorce. Ideally, the prospect of divorce will have been addressed with a prenuptial agreement or another form of pre-divorce planning. Unfortunately, most people make no such preparations and end up attempting to protect assets in a high stakes divorce. Our attorneys are here to protect your business and your other assets during this unfortunate period of your life.
How to Proceed
If you are considering a divorce or have already separated and are worrying about your professional practice, do not panic. Just because your marriage is breaking down does not mean the other party can manipulate assets. If the judge suspects your spouse is attempting to obtain assets through divorce, it will be awfully difficult to maintain credibility. Your best course of action is to lean on an attorney for assistance, present all of your assets including your professional practice exactly as they are and comply with the tax code. The practice should continue to operate as it usually does regardless of the fact that there is a divorce unfolding.
Discovery is one of the first steps in the divorce process. The attorneys get together to take stock of the marital estate. All of the married couples' assets will be accounted for. It does not matter if one or both spouses joined a professional practice prior to the marriage. The professional practice will still be considered a part of the couples' marital estate regardless of when it formed or when one of the two parties joined.
Even the professional practice's increase in value throughout the marriage is a component of the marital estate. This is precisely why attorneys engage in the discovery process. The value of the professional practice when the marriage occurred and when the divorce occurred are noted in order to calculate the percentage of value of the practice that is a component of the marital estate. Every type of financial record is available for analysis during the discovery process.
Why the Value of the Professional Practice Must be Determined
The practice's value can be considered to be a part of the marital estate. There might be a partnership agreement that explains in the event of a partner leaving the business, the book value will dictate each partner's share. Yet such a means of valuation will not suffice for a divorce. There are certain valuation issues that will be of concern in businesses. Personal or professional goodwill is by far the most important. In order to gauge the true value of the professional practice, the standard of value must be determiend. Commonly accepted standards of value range from the fair market value to original cost value, going concern value, investment value, appraised value and liquidation value.
The fair market value of the professional practice is the price a buyer is willing to pay to acquire the asset on the open market. In terms of divorce, the court has to find current net fair market value. This is the fair market value decreased by the amount of liens and/or additional business debts as of the date of the valuation. Judges tend to agree the net fair market value should not be reduced by the costs of the potential sale.
Alternatively, liquidation value is the amount of money the owner would be provided if forced to sell the professional practice. This assumes the seller is being forced to sell so the price will almost certainly end up lower than fair market value. Judges typically avoid this method of valuation as it does not represent a fair standard of value.
The Process of Protecting Your Professional Practice in Divorce
In the vast majority of cases, it is in the best interest of both parties to keep the professional practice operating after the marriage has ended. However, it must be determined if the practice is considered to be marital property. In general, judges tend to rule if the business began during the marriage or grew significantly during the marriage, it is to be considered a component of the marital property settlement. You need a matrimonial attorney on your side to protect the business you have worked so hard to build.
Your attorney will ensure your professional practice is valued at an acceptable figure in order to guarantee equitable division. All sorts of different factors must be considered when gauging the value of your professional practice. Everything from the location of the facility to the extent of the real estate holdings, bank account balances, accounts receivable accounts, inventory levels, building equipment and beyond. Even the value of the professional practice beyond the tangible assets, or its “goodwill”, will be taken into consideration when gauging its total worth.
A Legal Representative Will Prove Critically Important in Protecting Your Professional Practice
Once the fair value of your professional practice is agreed upon, the challenge becomes meeting opposing counsel at a settlement figure that is mutually beneficial to both parties. We will zealously advocate on your behalf to safeguard your interests. This is not the type of legal challenge you want to take on by yourself. The issue of marital property division is one of the more complex aspects of the law.
Aside from the legal hurdles involved in protecting a professional practice in a divorce, there are also emotional challenges as well. Our legal team will customize support to the nuances of your divorce and professional practice. We will operate with your best interests in mind every step of the way. We are proud to customize every aspect of our legal strategy to the nuances of each divorce case. There is no one size fits all approach to protecting professional practice during a divorce. An in-depth analysis of assets, contributions, the professional practice and other factors will prove essential to determining which party deserves what, how much and so on. Your attorney will prove essential to proving you solely deserve to benefit from your professional practice and other efforts to make money.
Do not Underestimate the Threat Divorce Poses to Your Professional Practice
A licensed professional who is served divorce papers or decides to put an end to a failing marriage is in a difficult position. It is certainly liberating to exit a failed marriage yet there is plenty to lose in terms of assets. Your professional practice is your primary source of income. Furthermore, you have invested your entire life in building yourself and your business. Think of all the time, money and effort spent on your college education. You invested yourself in this endeavor so you should not lose it simply because your marriage did not work out as hoped. In a situation such as this, fear is perfectly healthy. Your ex-wife or ex-husband has the potential to take what you have worked so hard to build across the past decades.
Our attorneys are here to aggressively protect your professional practice and your financial interests. We have a team of skilled negotiators. Our mission is to keep your practice under your control and ensure you are provided with the fruit of your labor. Our attorneys have successfully represented dentists, doctors, architects, attorneys, chiropractors and all sorts of other professionals. In some cases, the assistance of our attorneys has helped keep these businesses open and profitable.
Property Division Done Right
We understand you depend on your license and your practice for your well-being. Our attorneys will protect this source of revenue with every legal tool and strategy in our arsenal. We are as detail-oriented as it gets. Our attorneys will study your unique situation in-depth to develop the perfect legal strategy. If the assistance of forensic accountants or business valuation professionals is necessary, we will bring them in. We will do whatever it takes to obtain an accurate valuation of your professional practice as well as your other assets. We won't stop until we have clearly separated personal property from marital property and made a convincing case to protect what is deservedly yours.
There is no doubt it is incredibly unfair for a spouse to obtain financial benefit from a partner's business following divorce yet it occurs quite frequently. Judges are awfully sympathetic to the argument that a spouse's contribution to the marriage, the personal growth of the husband/wife or even taking care of the kids qualifies as effort worthy of compensation. This is precisely why you need a skilled matrimonial on your side who specializes in the protection of professional practices in divorce.
If there is any case to be made your spouse did not contribute to the growth of your business or had no part in your business success at all, we will present this evidence in a clear and convincing fashion. After all, your spouse should not be provided with ownership or revenue from your business if she or he did not invest the blood, sweat, tears, time and money required to build it in the first place. Our attorneys will not stop pushing for justice until your property division is fair and just.
A Custom-tailored Approach to Protecting Your Professional Practice in Divorce
Give our legal team the chance to protect your professional practice during this difficult period of your life and you will find out why we have established quite the reputation for superior customer service. Our legal team is as courteous as it gets. We will walk you through every step of protecting your professional practice during divorce. Our team is here to answer all of your questions and address your concerns. We will explain the nuances of this legal process in-depth from establishing fair valuation of the practice and business property to determining if any part of the practice is marital property or if it is fully separate. Our legal team will explain your tax obligations and how they might impact the property settlement.
Perhaps the value of the professional practice has appreciated throughout the marriage. We will break down exactly what the law says about what your spouse is entitled to after this value appreciation. There is also the matter of what your spouse contributed toward the professional practice's growth versus what you contributed. If your spouse made meaningful contributions to your professional practice and/or your career, the judge will be that much more likely to provide her or him with favorable terms.
Opposing counsel will attempt to argue the fact that you have a professional license and/or an advanced degree means you have a comparably high earning capacity. Though this argument might have an element of truth to it, your attorney should be able to persuasively argue that future earning capacity does not mean it is fair for you to lose some or all of what you have worked so hard to build. Our matrimonial attorneys will fiercely advocate on your behalf to protect your professional practice no matter how dramatic and ugly your divorce becomes.
Support in Your Time of Need
If you are a professional such as a dentist, doctor, engineer, accountant or have another type of license, you have enough to worry about with the responsibilities of your job. Your work is incredibly demanding and stressful. The last thing you should have to worry about is how to protect your professional practice after your marriage does not work out. You have enough pressure with work matters to start with. You should not have to be concerned with how a split from your spouse will impact your business.
San Diego Family Law Attorney understand you have spent decades building your practice. We are steadfastly committed to protecting your professional practice as well as your personal interests throughout the entirety of the divorce. Our attorneys are savvy, experienced and dedicated. The bottom line is the end of your marriage does not have to result in the end of your business. Let our legal team help and we will do everything possible to preserve your professional practice throughout your divorce. It does not matter if your divorce takes months, years or longer. We will be there to help every step of the way. Contact us at 619-610-7425 for a detailed consultation.