If you are a doctor, lawyer, or own your own business or medical practice and are facing a divorce, you have specific and unique considerations that you must address in order to ensure your legal, professional, and financial rights remain protected. In most divorces, there is an equitable division of marital assets and debts. However, when one spouse owns a medical practice or professional practice, the division of this marital debt can prove challenging and legally complex. Building a professional or medical practice is typically a lifetime endeavor, and likely one of the marriage’s most substantial assets. If you are a medical practitioner or have a professional practice, learn the seven most important aspects you should consider when facing divorce.
1. Receive a Valuation of Your Business
Your medical or professional practice will likely be considered a marital asset and face the process of division. As a result, you will need to determine the value of your professional or medical practice. The process to value a business is a complex one, and typically needs to involve a valuation expert. Consider the following aspects regarding the valuation of your business.
- According to the Internal Revenue Service, your business valuation will include both tangible and intangible components of your business. This will take an experienced professional to determine.
- There are circumstances in which a professional or medical practice is not considered a marital asset. This situation occurs when the professional or medical practice began long before the marriage started, or if the business was somehow excluded within an established and binding prenuptial agreement.
- Even if the business began before the marriage started or is covered by a prenuptial agreement, if the business grew, expanded, or increased profits, there may be a solid chance that those additional profits or assets can be considered marital property.
- If you want to continue to practice or continue business operations instead of selling the practice or business, you may have to find creative ways to repay your spouse for their share of the business.
- Visiting with an experienced family law attorney can help you understand your legal rights regarding the valuation of your business and ensure that the division occurs appropriately.
Final Tip: If you can agree with your spouse on who to choose as a business valuation expert, it can save a great deal of time and money throughout the divorce negotiation process. When making the decision to select an expert, consider visiting with several and investigating those valuation experts suggested to you by your divorce attorney.
2. Student Loans
If you are a doctor, lawyer, or another type of professional, you likely have large student loan debt remaining. If the student loan debt occurred prior to the marriage, it is considered a personal debt, and not a marital debt. However, if you went to law school or medical school during part of your marriage, then it is considered marital debt for legal purposes. In most cases, the student loan debt will be assigned to the spouse that incurred the debt. However, some student loans are used for living purposes during the time that a spouse when to school, it may be considered marital debt. An important question to ask is: What was the student loan money actually used for? Was it used directly to pay school expenses? Was the loan money used to pay for living expenses?
Final Tip: In some cases, if one spouse still owes student loan debt, this debt can be used to offset the value of the business when a full calculation is done of marital assets and debts. Visiting with your family law attorney can help you make these determinations, as this area of divorce is extremely fact-specific to your specific circumstances.
3. Child Custody
The family courts in the state of Arizona will always look to what is in the best interest of the child regarding child custody and visitation schedules. In most cases, family courts will attempt to encourage equal amounts of parenting time between both parents. However, in some cases where one parent works long hours as a medical provider, lawyer or businessperson, and the other parent only works part-time or has less stressful professional obligations, the court may take these working times into account regarding child custody. If you have a professional or medical practice, you still have the legal right to visit with your children and have substantial amounts of custody time. Consider visiting with your family law attorney in order to help ensure that your legal rights are protected with respect to your child custody and parenting time.
Final Tip: There are creative ways to develop parenting plans that may work better with schedules that involve busy parents. For example, perhaps one week on/one week off, or having one parent see children in the mornings while the other sees children in the evenings could work better. In cases where a doctor knows their on-call schedule for the month ahead, or a lawyer knows their caseload ahead of time, creative agreements can be reached that ensure that both parents receive quality time with their children.
4. Child Support
The state of Arizona requires parents to both emotionally and financially support their children. If one parent spends more time with a child, they inherently incur additional expenses regarding the rearing of that child. Child support calculations are done in the state of Arizona through a specific calculator that will determine the amount of payments one parent will make to another through a specific formula.
However, the Arizona Child support calculator stops calculating child support at $20,000 a month of combined monthly income. Because parents that are doctors, lawyers, and other professionals may make substantially more than this, additional calculations need to be done to ensure that both parents financially support their children equally. Additionally, in some cases, the children of such parents may have additional or extraordinarily high expenses such as private schooling or specialized activities.
Final Tip: If you own a medical or professional practice and make more than $20,000 a month, visiting with an experienced divorce attorney can help you understand the payments you will need to make regarding your child support, and ensure that you not only take care of your children financially but that the calculations are done accurately and fairly.
5. Spousal Maintenance
The state of Arizona will allow one spouse to receive spousal support (also called spousal maintenance or alimony) from another spouse under the following conditions:
- The receiving spouse lacks sufficient property to provide for their reasonable needs
- The receiving spouse is unable to be financially self-sufficient through employment as they are the primary custodian of a child whose minor age or condition would prevent them from seeking employment outside of the home
- The receiving spouse is unable to be financially self-sufficient through employment due to the lack of education or work experience in the labor market that would allow them the ability to earn an income
- The receiving spouse contributed to the educational opportunities of the other spouse, and their sacrifice allowed the other spouse to develop and build a professional or medical practice
- The marriage between the spouses lasted a significant amount of time, and the age of the receiving spouse precludes them from any attempt at gainful employment substantial enough to be financially self-sufficient
If one spouse sacrificed their own professional development in order to allow the other spouse to develop and build a successful career, there is a substantial chance that the professional or medical spouse will have to make spousal maintenance payments.
Final Tip: There is no established calculator regarding alimony or spousal maintenance payments in the state of Arizona. If you believe that your ex-spouse will request alimony or spousal support in the divorce, visiting with an experienced attorney can help you examine your specific facts and circumstances and ensure your legal and financial rights are protected if the court orders you to pay alimony.
If you are a business professional or own a medical practice, you have a vested interest in ensuring that the matters regarding your divorce (both financial and otherwise) are kept confidential. Some divorces become quite adversarial and the record of a divorce is often public information. The information leaked from a divorce could negatively impact a person’s professional reputation.
Final Tip: Ask your family law attorney whether or not the records of your divorce can be sealed. This needs to be a proactive request to the court, as without an actual request, all divorce information is considered public record.
7. Contact an Experienced Family Law Attorney
The most important aspect a doctor, lawyer, or other professional should consider when facing divorce is to immediately contact an experienced family law attorney. Your divorce will include specific and unique challenges that do not exist in other divorces, and you will want to ensure that your legal and financial rights remain protected, as well as your right to child visitation and your privacy. Contact one of our experienced family law attorneys at My Modern Lawin Scottsdale, Mesa, Peoria, or Phoenix, Arizona who can provide you with answers and ensure that all of your rights remain protected.
Final Tip: Contact us at (480) 470-7731 or online today.