The division of a professional practice during a divorce in Texas presents several unique challenges. Whether the practice is medical, legal or another type of professional service, it is often considered a significant marital asset that you must address in the property division process.
Texas is a community property state, which means that any such property acquired during the marriage is typically subject to division between the spouses.
Preparing your practice for divorce
When dealing with a professional practice, there are multiple factors to address upfront. First, you must determine the exact value of the practice. This usually involves assessing the business’s assets, liabilities and future earning potential. Financial experts can conduct a business valuation, taking into account tangible assets such as real estate and inventory as well as intangible assets like goodwill and client lists.
Protecting the practice via buyout
To prevent dividing your professional practice, you have the option to buy out your spouse’s interest in the practice. This would allow you to retain full ownership while compensating the other spouse for their share of the practice’s value. If a buyout is not feasible, such as if your spouse is unwilling to negotiate, the court may order the sale of the practice and the division of the proceeds.
If your practice is an important part of your livelihood, then protecting the practice’s future operations is essential. Be sure to maintain confidentiality with client information and minimize disruptions to the business throughout the divorce process. Through careful planning, you can keep your practice intact and continue offering professional services as normal.