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Valuing a medical practice for physician divorce

On Behalf of | Aug 13, 2020 | Divorce

When a divorce involves a physician who owns a medical practice, determining the value of the clinic will be critical. The law requires divorcing parties in Houston and throughout Texas to split marital assets equitably in divorce. The other spouse may deserve a share of the value of the physician’s medical practice. In each case, the first step in fairly dividing a medical practice is determining the value of the medical practice.

How to value a medical practice in divorce

There are a number of ways to value a medical practice. The accounting records of the business are important. The court looks at income, expenses and profits over a period of time. The physical assets of the building, including real estate value and medical equipment, are also an important part of the valuation process. Most businesses have periods of high income and periods of setbacks. If the value of the medical practice varies over time, the court considers a period of at least a few years prior to the divorce.

Valuing a medical degree in divorce

Having a medical degree will also be a relevant factor when divvying up marital assets. If the other spouse supported the physician in earning their degree, the value of the degree itself may also be part of the valuation. Determining a fair value for the medical practice should include evaluating the value of the medical degree. The parties may value the degree as part of the larger practice valuation or as a separate income-generating asset.

How an attorney can help value a medical practice

A family law attorney can help you take the right steps to value a medical practice. Both parties may stipulate using the same evaluation conducted by a single person or entity. However, it’s more common for each party to retain their own forensic accountant and use the discovery process to gather evidence. Once the parties have gathered evidence, they may negotiate a final agreement on the value of the medical practice. If negotiation becomes a problem, a divorce attorney can help you present evidence that will determine the true value of the medical practice.

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