When a medical practice is part of a divorce

Residents of Joliet and nearby counties of Illinois will want to learn more about divorces that include physicians. How is the medical practice seen? The medical practice will receive consideration as an asset whether the doctor is part of a group practice or a partnership.

According to experts, several factors may receive consideration. These include:

• The kind of entity
• When the practice was established
• Funding
• Stock issuance
• Buy/sell agreement
• Future vesting of stock

The value of the practice may depend on certain factors

As well as looking at liabilities, a forensic accountant may consider:

• Tangible and financial assets
• Accounts receivable
• Office equipment
• Furniture
• The office lease
• “Goodwill,” an intangible asset

What type of liabilities may receive consideration?

Some of the liabilities may be insurance costs, contributions to retirement plans and taxes that are due. Loans may also receive consideration in a divorce.

Know that a non-physician cannot own a medical practice

A person who is not a doctor cannot employ a physician as well. This applies to the spouse of a physician who cannot take over a share of a medical practice. He or she is, thus, not allowed to become an “owner” of a practice.

There may be a forfeiture of stock

Sometimes, a practice agreement states that if a partner dissolves his or her marriage, that member will lose his or her stock through forfeit. However, after the divorce, it may be possible to buy back that stock.

The right “expert” is an important choice

The credentials of the forensic accountant must receive verification to allow him or her to testify. After all, a loss of many thousands of dollars may happen with the wrong forensic accountant who values the practice incorrectly.

A physician’s medical practice must have an expert forensic accountant. The valuation of the practice may depend on many factors, which should receive consideration in a divorce. It is important to look at this asset fairly as it is a valuable piece of the divorce settlement pie.