Divorce and Your Medical Pracitce
Touchy question, but I'm starting the divorce process and want to know how/if my medical practice will be affected?
Thanks, Dr. W
Dr. W, this is a touchy, but common question that should be addressed. Since matrimonial is outside my scope of expertise, I’ve asked my colleague Jill Spielberg, Esq. of Harold Salant Strassfield & Spielberg to comment. Jill provided that:
While the operation of your practice on the day-to-day shouldn’t be affected by divorce, there may be a significant economic impact from your divorce on your personal finances that would impact your medical practice as a result of several factors.
First, is the timing of your medical education, training and creation of your practice relative to the date of your marriage. The law provides that any asset obtained during a marriage is "marital property" and subject to division in the divorce. If, for example, you graduated from medical school, completed all training and entered into the practice which you are now in, all before the marriage, your medical degree, license and practice are all "separate property" and only minimally involved as assets in your divorce. On the other hand, if you attended medical school, trained and became involved in practice after the wedding, the license and practice will be valued and subject to "equitable distribution" in the divorce.
Second, in recent times, the share to be expected by the "other" spouse from the value of the practice has been decreasing. Now, a range of 25-35% of the value of the practice is considered reasonable. This depends upon the individual circumstances of the couple. If the other spouse worked in the practice and was actively involved in the creation of the practice and/or worked while the other was in Medical school or training that would enhance the share to be expected. In a relatively "long-term" marriage (more than 10-15 years), the claiming spouse has a better argument for a greater share.
Third, a great deal depends upon what other assets are available for distribution. If, for example, a license/ practice is valued at $750,000 and a marital home is valued at $500,000, that may result in an even trade (based upon 33% of license/practice for spouse and 50% of marital home.
In sum, there is no reason for divorce to affect the business operation of the practice if you are adequately represented and act sensibly. Also, be advised that if you must pay a significant amount of money to your spouse on account of his/her "share", that can be spread over years of periodic payments.
Jill Spielberg regularly represents healthcare practitioners in matrimonial matters, and is a frequent contributor to healthcare forums, commenting on matrimonial issues and its impact on providers. To contact Jill about the above or any related question, call (914) 683-2500 ext.315 or email firstname.lastname@example.org.
For additional information on this topic, contact Jennifer Kirschenbaum at (516)-747-6700 ext. 302 or at Jennifer@Kirschenbaumesq.com.
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Contact Jennifer at Jennifer@Kirschenbaumesq.com or at (516) 747-6700 x. 302.
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com