The Healthy Journal reported that nearly 22% of doctors divorced in 2022. Divorce often raises concerns about asset division, especially for valuable assets like a medical practice.
Medical professionals facing a divorce need to understand how the law addresses the division of such an asset. Texas law follows specific guidelines for asset division, which can significantly influence the fate of a medical practice owned by one or both spouses in a marriage.
Community property vs. separate property
Texas law considers all assets acquired during the marriage as joint property, subject to division upon divorce. However, if one spouse owned the medical practice before the marriage, it might qualify as separate property and not be subject to division.
Non-owner spouse’s contributions
Even if one spouse owned the practice before marriage, the other spouse’s contributions, like support or financial investment, could give them a right to a portion of its value.
Valuing the practice
Valuing a medical practice involves assessing tangible assets, reputation, current earnings and future earning capacity. This valuation is important for determining each spouse’s entitlement.
Exploring buyout or co-ownership
If the court decides that both spouses have rights to the practice, options like a buyout of one spouse’s share or continuing co-ownership might be on the table. However, it should be noted that ownership can only be divided if both spouses are medical professionals.
Understanding these factors is helpful for preparing for potential outcomes. While a divorce can introduce uncertainties in asset division, knowing Texas’s specific legal considerations can guide medical professionals through this difficult period. The goal should be a fair and equitable solution that respects both parties’ contributions and the practice’s value.