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Your medical practice during divorce

On Behalf of | May 24, 2023 | High-Asset Divorce

Thousands of physicians are practicing in California, and inevitably some of those physicians will find themselves involved in a divorce. A divorce is usually a difficult time, and financial considerations are frequently a significant issue in resolving the divorce. Being a physician can complicate these matters further.

As a physician, you’re likely part of a medical practice. Assessing the value of a medical practice is often a significant part of adjudicating a high-asset divorce.

Assessing a medical practice’s value

The divorce process involves taking inventory of the couple’s assets, and a medical practice is nearly always treated as a high-value asset for these purposes. That means you and your ex-spouse must arrive upon an agreed-upon valuation for your practice.

This can frequently be a complicated task, as many factors can impact the assessment, including:

  • Was the practice founded before or after the marriage?
  • Who funded the practice?
  • How many partners are part of the practice?
  • Was stock issued, and do any buy/sell agreements exist?

Generally, it will be necessary for a forensic accountant with experience in the field to do the assessment.

Complicating factors

Note that it’s generally against regulations for a non-physician to own a medical practice or employ physicians. Making a spouse a co-owner in the practice may not be feasible, and you’ll need to find a financial agreement.

In many divorces involving a physician, each side will have hired a financial expert to assess and testify as to the value of the practice. These assessments will sometimes vary significantly, leading to a court battle. In these situations, it behooves you to have access to the best forensic accounting witness possible.

Getting divorced as a physician is frequently complicated by resolving the value of your medical practice. This can be a technically challenging proposition that carries the risk of creating further complications.