Divorce Can Affect How Much Of A Practice A Physician Can Keep
People in New Jersey know that a divorce affects many aspects of a person’s life, including the way a physician can continue with a medical practice after the family’s assets are divided. How much of a physician’s medical practice will actually be granted to their spouse in a divorce is based on a group of variables including state laws and the judge’s discretion.
Depending on when the physician acquired the practice and in what state the physician lives in, the medical practice might not even be up for negotiation in a divorce. If the physician lives in one of the 9 community states, everything acquired after the marriage should be divided 50-50. If the physician acquired the medical practice before the marriage, any increase in the value of the practice is then included in the community property.
The percentage of the practice that a physician will keep after a divorce settlement is not standard. Lawyers can argue that a spouse gave up their chance at a career or devoted time to work at the physician’s practice with low or no pay. All this can affect the property division or the alimony settlements. New Jersey, for example, has something called reimbursement alimony. This means that if a spouse helped to put the physician through medical school, but the couple divorces before they can enjoy the benefits of a better lifestyle, the spouse can be awarded reimbursement alimony based on the lifestyle they should have enjoyed from the spouse’s education.
When both spouses are physicians who share a practice that they either acquired after marriage or where they became partners at the same time, the split would be closer to 50-50. In most cases, if the spouses do not want to continue working together, one spouse must receive compensation for their share. When spouses do not own a practice, but one of the spouses belongs to a practice, their spouse must also be compensated for their share of the physician’s equity in that practice. The division of marital property is based on many different aspects of the law. A lawyer is a good resource for explaining the law and advising how to negotiate.
Source: Medscape News, “How Divorce Could Affect Your Medical Practice“, Dennis G. Murray, July 17, 2013