Doctors Getting Divorced in New Jersey: Equitable Distribution & Medical Practice Valuation
In New Jersey divorces, the process of allocating marital assets between the parties is called “equitable distribution.”
As the term “equitable” suggests, that process is not a mechanical exercise. Marital assets are not automatically divided equally. Equitable distribution requires sensitivity to the facts and equities of each case.
That process is especially complex when one of the divorcing parties is a physician who is a partial or sole owner of a medical practice.
Although more and more New Jersey physicians have become employees of large groups, there are still a significant number of New Jersey physicians who have their own practices or are members of a smaller group. When those doctors get divorced, the physician and his or her estranged spouse will often disagree over the value of the practice, whose value may be based in large part on the intangible asset of goodwill.
That is why it is vitally important for a New Jersey physician who is getting divorced, to retain a very experienced New Jersey divorce attorney who can assist the doctor through the difficult process of equitable distribution when a medical practice is at issue.
Because a medical practice is a business, in the event of a genuine dispute, there needs to be an accurate accounting and valuation based on a thorough investigation by a qualified business valuation expert who understands the laws, accounting procedures and evaluation methods specifically applicable to medical practices.
For purposes of a divorce, good business valuation experts will analyze several aspects of a medical practice to determine its value, such as hard assets (equipment, supplies and facilities), liquid assets (bank account balances after expenses are paid–including the physician’s salary), accounts receivable (the moneys due from patients and insurance companies for the physician’s professional services), and goodwill (the value of a business over and above the value of the hard assets, liquid assets and accounts receivable).
Those experts must also determine which of the different valuation approaches is most appropriate for valuing the medical practice.
A very experienced New Jersey divorce lawyer will be able to guide you in choosing the best valuation expert. Needless to say, that choice is one of the more significant ones in your New Jersey divorce.
Salvaggio Law Group LLC devotes its entire practice to New Jersey Divorce and Family Law matters. They understand the complexities of physician divorces and medical practice valuations. If you want to talk, please call us at (973) 455-1220 or fill out the Contact Form on our website.