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.
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.