How is a Professional Practice Split During a Divorce?
Posted on October 08, 2024 in Asset Division
Dividing assets, including one spouse’s professional practice, can further complicate an already complex divorce. Although Illinois is an equitable distribution state, a professional practice that existed before the marriage may be considered a separate asset. If it was created during the marriage, then at least a portion of it will likely be considered a marital asset.
The difficulty lies in the fact that professional practices are often an extension of the professional practitioner – making it difficult to calculate a monetary value. If you or your spouse has a professional practice, a knowledgeable Wheaton, IL divorce lawyer with significant experience in valuing and protecting professional practices can be crucial.
What Is Considered a Professional Practice?
Professional practices include occupations that require a prolonged period of education and training and are often overseen by professional bodies that accredit educational establishments and qualified professionals. The following are examples of professionals who commonly have their own practices:
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Medical doctors
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Lawyers
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Engineers
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Dentists
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Architects
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Chiropractors
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Financial planners
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Accountants
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Psychologists
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Social Workers
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Veterinarians
Do Professional Practices Fall Under Illinois Equitable Division Rules?
Although many people see a professional practice as an extension of the practitioner, the law does not. A professional practice created during a marriage will almost certainly be subject to division; a professional practice opened prior to the marriage can be more difficult to divide.
If the value of the practice has increased during the marriage, even though the practice began before the marriage, the increased value is subject to division. If the practice began before the marriage but marital funds helped grow or maintain it, it may have changed from a separate asset to a marital asset.
If the spouse who is the professional practitioner did not take a salary from the practice during the marriage, it becomes even more complicated because the family likely took a financial hit as a result. Finally, if the non-practitioner spouse worked at the business in some capacity, this could also impact the decision on whether it is a separate or marital asset.
How Can You Split a Professional Practice?
A practice is generally not taken away from the practitioner during a divorce because the value of the practice specifically stems from that person. The practice will need to be valued so that the non-professional spouse can be reimbursed for his or her fair share. Valuation of professional practices can be complex and requires a skilled professional with experience in valuing similar practices.
One of the complications is that a professional practice without a professional is worth considerably less. Therefore, the value the professional spouse brings to the practice must be taken into consideration, and that is often more difficult than the valuation of the practice itself.
Most often, once a value has been attached to a professional practice, the non-professional spouse will choose a marital asset similar in value to his or her portion of the practice so that it remains solvent. For example, a spouse might take the couple’s vacation home in exchange for his or her portion of the professional practice.
Contact a DuPage County, IL Asset Division Lawyer
Attorney Andrew Cores is an experienced family law attorney who is currently a Fellow of the Collaborative Law Institute of Illinois. When you have an experienced Wheaton, IL divorce attorney with experience helping people who own professional practices, the outcome of your asset division is much more likely to be favorable. For each case and each client, our knowledgeable attorneys and staff will fully investigate the issues and prepare for every eventuality as we advocate for you at every turn. Call Andrew Cores Family Law Group at 630-871-1002 today to schedule your free consultation.
