How Is a Professional Practice Impacted by Divorce?

There are many issues that can further complicate the already-complicated divorce process, but a professional practice can be one of the most challenging. If you are facing a divorce that involves a professional practice, you owe it to your future to seek the professional legal counsel of an experienced Chicago divorce attorney from the outset. 

The Division of Marital Property

In an Illinois divorce – as with divorces across the nation – one of the primary terms that must be resolved is the division of marital property, and in the State of Illinois, this includes anything that you and/or your spouse acquired during the course of your marriage. While many people think of professional practices as being an extension of the professional practitioner – whether he or she is a doctor of any kind, clinician, chiropractor, financial advisor, attorney, or anything else – this is not how the law sees it. 

A professional practice that is created during a marriage is almost certainly marital property (barring an enforceable prenuptial or postnuptial agreement that addresses the matter). Illinois requires that all marital property be divided between both spouses equitably – or fairly in relation to the unique circumstances at hand – in the event of divorce, and when a professional practice is in the mix, the matter can become exceptionally challenging. 

A Professional Practice Opened Prior to Marriage

It’s important to note that even if the professional practice in question was opened prior to the marriage that is now ending, it isn’t necessarily the end of the matter. Consider the following:

• Any increase in the practice’s value will be considered a marital asset.
• If marital funds helped grow or maintain the business, it may have crossed the line from a separate to a marital asset.
• If the spouse who is the professional practitioner failed to pay himself or herself a fair wage through the business, it can alter its separate nature (due to the financial hit the family likely experienced as a result).
• If the spouse who isn’t the professional practitioner helped run the business, it can cast doubt on its separate nature. 

Dividing the Asset

Generally, the practitioner and the practice will not be parted in a divorce due to the obvious value that comes from the practitioner continuing to practice. Ultimately the value of the asset will need to be established, and the spouse who isn’t the professional practitioner will need to be reimbursed for his or her fair share or will need to receive something else of similar value (or some combination of the two will need to happen). Obtaining a business valuation (that both spouses are willing to sign off on or that is ordered by the court) in and of itself can amount to a serious challenge. In other words, it’s complicated. 

Reach Out to an Experienced Chicago Divorce Attorney Today

The formidable Chicago divorce attorneys at WARD FAMILY LAW have the experience, legal insight, and keen skill to help you advantageously resolve your divorce concerns as they relate to ownership of a professional practice. We’re on your side and here to help, so please don’t put off contacting us for more information today.