If a spouse owns a business the value of that business is considered in the context of equalizing assets. Many people wonder if this concept also applies to professional practices, such as doctors and lawyers. The simple answer is “yes” but there are a number of considerations.
What Arizona Law Says
In Arizona, professional practices may have their own independent value, which is considered in the overall division of assets and debts. Arizona utilizes “fair value” (rather than fair market value) in determining the value of a professional practice. So, even if your practice is not marketable for sale and would be nothing without you, it may still have a value.
The community’s interest in the practice will be affected by whether or not you started the practice before marriage or after, and different valuation methodologies apply depending on that factor. Because a “fair value” analysis includes an element of value based on your ability to continue to generate income from the practice, many experts consider a spousal maintenance award in addition to the value of the practice in an asset division creates the possibility of “double dipping.” It is definitely worth talking to your attorney about this.
If your business is not sellable or has no value if you walk away, it does have potential value for purposes of division in your divorce in the state of Arizona. This applies to any type of professional practice, whether you have are a doctor and have your own clinic or an accountant with your own firm.
Hallier Lawrence Can Help You
At Hallier Lawrence, we understand the importance of protecting professional assets when going through a divorce. Every case is unique and we work closely with our clients to assess their situation for the best possible outcome.
Contact us at Hallier Lawrence for more information.