For professionals who own their own practice in New York, protecting their business and reputation during the divorce process is crucial. Fortunately, there are ways to safeguard your interests and ensure that your professional practice remains intact after the split.
An experienced New York high net worth divorce attorney at Douglas Family Law Group can help you navigate the complex legal landscape ahead.
Professional Practices Cannot Be Split Between Spouses
Professional practices cannot be split between spouses according to the equitable distribution principle. This means that if you own a medical, legal, or other professional practice, it will not be divided up like other marital assets.
Instead, only one spouse can operate the practice after the divorce. If both spouses are licensed professionals and have been operating the practice together before the separation, then they must decide who gets to keep running it post-divorce.
This decision can often be contentious and it’s best to address it early on in divorce negotiations, with a skilled high net worth divorce attorney representing your interests.
The Court Will Never Force You to Sell the Practice and Split the Money
The court will never force you to sell your practice and split the money with your spouse. Instead, the court will assess the value of your professional practice and determine what portion of it is considered marital property. The other spouse will then be awarded assets representing their share of that value.
This does not mean your ex-spouse automatically has ownership or control over any part of your business. Only the licensed spouse can operate the professional practice, even if there are joint marital funds invested in it.
The Other Spouse Will Get Marital Assets Representing their Share of the Practice Value
It’s important to note that just because one spouse holds the license does not mean they automatically own all of the value of the practice. In many cases, both spouses have contributed significantly towards building up the business’s value over time.
In New York, the other spouse is entitled to receive their share of the practice’s value in the form of marital assets. An equitable distribution of assets will be carried out by considering each spouse’s contribution and involvement in the professional practice.
Once an accurate evaluation has been made, equivalent marital assets will be allocated to compensate for each partner’s rightful share. These may include real estate properties, investments, or even retirement accounts – anything that represents equal value without disrupting the operation of the professional practice itself.
How Will the Court Assess the Value of a Professional Practice?
The court will typically hire a financial expert to evaluate the professional practice and provide an accurate estimate of its value. The expert may consider factors such as revenue, assets, liabilities, and market trends when making their assessment.
New York courts will opt for one of the following valuation methods:
- Original cost to set up the practice or the price paid for purchasing an established practice
- Book value
- Fair market value
- Liquidation value.
Also, the evaluators will take into account specific practice-related factors, such as:
- The goodwill the practice has acquired
- Intellectual property
- Key employees
- Location of the practice.
Once the value of the practice has been assessed by experts and presented in front of the court, marital assets representing each spouse’s share of this amount will be distributed fairly, but not necessarily equally between them.
An Experienced New York Divorce Lawyer Will Help You Protect Your Practice and Professional Reputation!
If you are going through a divorce in New York and have a professional practice that needs to be protected, it is important to seek the guidance of an experienced divorce attorney.
The knowledge and expertise of the legal team at Douglas Family Law Group will help you navigate the complexities of dividing assets during a divorce while safeguarding your professional reputation.
Remember, protecting your practice requires careful planning and execution – so don’t wait until it’s too late! Contact us today at 914-615-9058 for expert legal assistance with your high net worth divorce case!
