Perhaps you are a family physician who has opened their own practice. Maybe you are an accountant and you started your own firm. Your successful professional practice allows you to monetize your education and skills. It also provides your whole family with financial support.
You have probably invested years of your life in the development of the practice after you already spent so long in school. You may have also invested financial resources into your practice. As one of your most valuable assets, it could also be a point of contention in a divorce. Can your spouse lay claim to your professional practice in a Virginia divorce?
The value of the practice, and how to divide that value, could be at issue
If you and your spouse don’t agree on how to value and divide your property, then a judge has to make those decisions. Their ruling must comply with the state equitable distribution statute, which seeks a fair division of property based on your circumstances.
Given that the practice depends on your professional efforts, and is likely not titled in your spouse’s name, a judge most likely would not award ownership of your practice to your spouse who does not work there. However, your spouse could have an interest in an equitable share of the practice’s value, especially if you started it during the marriage using marital funds and contributed significant efforts towards building the practice during the marriage. Business valuation and division can get even more complex if you and your spouse both had ownership interests in the business, or both contributed significant efforts to make the business successful.
Properly valuing your practice is a good place to start before negotiations with your spouse or property division hearings in court. The value of the professional practice may be less than you expect, especially when you factor in liabilities and asset depreciation. On the other hand, the value of your practice could be more than you expect. Finally, you may be able to claim that at least a portion of the business’ value is your separate property due to your individual, professional goodwill; it all depends on the facts of your case.
Learning about the rules that apply to asset division in Virginia divorces will help you protect what matters the most at the end of your marriage.