Knowing the worth of your medical practice is critical when getting divorced. You can use a few questions as jumping-off points to help determine how your divorce will impact your practice. For divorcing physicians in Nevada who want to ensure their practice isn’t jeopardized, it helps to know how your practice will be valued.
What plays into the value of a medical practice?
The entity type of your group practice is one critical consideration. Also, ask yourself when the practice was established. Whether the practice was started before or during your marriage makes a big difference.
The majority of physicians work as part of a group practice or partnership. It’s also important to consider how the practice was funded and whether any stock was issued to its participants. A buy/sell agreement may also play into the divorce settlement.
One aspect that factors into the practice’s value that isn’t easy to quantify is goodwill. Other considerations like the location of your practice and the business’s profitability should not be ignored.
Experts who report on the value of medical practices look at everything from financial and tangible assets, accounts receivable, the office lease, all the way down to furniture and office equipment. Certain liabilities will also factor into the value of the practice, such as taxes due, insurance costs, loans and contributions to retirement plans.
Do you have to tell the other doctors about your divorce?
In some cases, it is required that a divorcing physician lets the other members of the practice know what’s happening with their marriage. It’s important to keep everyone informed because there’s a chance that it will become a legal problem everyone must deal with.
What frequently happens in this type of divorce is a battle between two experts. Both parties hire their own professional to determine the value of the practice, and there may be a significant difference between what the two experts think. Taking these expert reports at face value is never a good idea. It’s necessary to look into the expert’s experience and credentials to determine whether or not they can truly speak with authority on the matter.
A divorce can have a major impact on your medical practice. This makes it crucial to understand how your practice will be valued as a financial asset.