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How a medical practice could factor into a divorce

| Aug 12, 2020 | Family Law

As with most other assets, the value of a medical practice could be divided in a New Jersey divorce. There is a good chance that both you and your spouse will have a team of professionals attempting to convince a judge that their valuation is the one that should be accepted.

Only medical professionals can own a practice

Generally speaking, those who don’t have a medical degree are barred from owning a stake in a medical practice. Therefore, you as a physician couldn’t offer to give your spouse an ownership interest in such an entity as part of a final settlement unless that person was properly certified. Instead, you would either need to liquidate your own holdings or transfer a percentage of future profits to that individual.

How to determine what a spouse might be entitled to

Your attorney will likely ask a series of questions to determine how the value generated from a practice should be allocated in a divorce. For instance, an attorney will likely want to know how it was funded as well as whether it was started before or after the marriage became official. Finally, it will be important to find out if a spouse might be entitled to compensation from stock options that will vest after the divorce is finalized.

During the process of ending your marriage, it’s important to consider the current and future value of joint assets. If you own a business, it’s generally in your best interest to take steps to create a fair market value based on objective criteria. It is also a good idea to avoid taking actions such as selling or transferring the company to a friend for less than market value. This could be seen as fraudulent and have an impact on how a settlement is structured.

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