There are numerous factors unique to professionals which require knowledgeable legal representation in divorce proceedings. Professionals are those individuals who require special licenses in order to practice their profession. Physicians, dentists, attorneys, accountants, real estate brokers, investment advisors, appraisers, and architects are a few examples of those who fall into this category.
Most professionals have invested considerable funds and years of hard work to achieve their accreditation. And those who have gone on to build their own professional practice even more so. The process of ascertaining the value of a professional license and/or practice and then negotiating each spouse’s marital share is complex and always requires exceptional legal counsel.
Investments in Professional Licenses and Practices
One of the first areas to clarify in a professional’s divorce is where did the necessary investments come from. Regardless if you or your spouse has a professional license, or a license and a practice, funds were necessary to realize those achievements. In addition to monetary considerations, there can also be other logistical issues which come into play. The answers to the following example questions are critical in divorce proceedings:
- In what stage of professional development did the marriage occur?
- Is there an enforceable prenuptial or post nuptial agreement?
- Did one spouse work to provide for the couple or family while the other advanced their career?
- Did one spouse otherwise assist the professional in building their professional practice?
- Where did the funds for education and/or a professional practice come from?
- Did one spouse give up their career to achieve the others professional status?
- Does the professional practice own or lease commercial real estate?
- Are there outstanding educational and/or business debts?
Whether you are a professional or are divorcing one, you deserve your appropriate share of the marital assets. The answer to the questions above begins the process of determining what share of the professional license and/or practice assets is rightfully yours. But keep in mind that these questions are just examples. Each professional’s divorce is unique and there are always additional factors for consideration.
Valuing a Professional Practice
Many professionals own and operate their own practice. Nevada statutes treat the value of a professional practice as any other asset. As a result, the value of the marital estate includes the practice’s value. These practices require a different business valuation method than other business types. The intangible properties of the assets make the valuation process more complex. Therefore, a business valuator with considerable similar valuation experience is necessary and always in your best interest. We have long standing relationships with the local business valuators who specialize in professional practices.
Goodwill is a Key Factor
Absent any real estate holdings or substantial equipment ownership, a professional practice typically does not have significant hard assets. Therefore, a large portion of the practice’s value relates to the professional license and “goodwill”. Both of these assets are intangible, and as such, can have differing values depending on the business valuator. Goodwill has several definitions, but for purposes of brevity, it is the value of the practice to continue to generate income. It can also be thought of as the value of the practice’s reputation in the community it serves.
Goodwill can be closely tied to the license holder of the professional practice. This is especially true in the case of a sole practitioner. When a sole practitioner runs a professional practice, any goodwill attaching to the practice is specifically dependent on the continuing labor of the professional who provides the services. If this person also manages the practice, this dependence intensifies.
Dividing the Professional Assets
It is impossible to physically divide a professional license and/or practice. But like any other marital asset, the value is subject to division between divorcing spouses. Once a valuation is agreeable to both parties, then the logistics of negotiating equitable offsets to the professional’s spouse is necessary.
There is no set formula which is appropriate in every professional’s divorce. But common offsets include equity in residential real estate, stock investments, cash, alimony, and other tangible assets. Your attorney’s efforts to achieve your goals and their skill set are often critical factors in you getting what you deserve.
Protect Your Marital Share
Ensure that you receive your maximum financial benefit whether you are a licensed professional or are divorcing one. Las Vegas divorce attorneys Jennifer V. Abrams and Vincent Mayo are skillful in handling these sophisticated professional divorces to your advantage. They have over two decades of successfully representing clients in complex divorce matters. Both attorneys offer courtesy phone consultations at no charge. Call our office at 702-222-4021 and they’ll be glad to speak with you and provide the peace of mind you deserve.