The valuation of a professional practice or business during a Louisville divorce is one of the most expensive and contentious issues one may face in a divorce. Professional practices including medical and dental practices, lawyers, engineers, accountants, architects or other licensed professionals as well as small business significant can present challenges for both parties in a divorce.
How do you value a professional’s interest in an ongoing practice or the genuine value of a company so that marital property interests in the practice may be fairly divided? This is why it is so important to contact Dodd & Dodd if you own a professional practice or business, or are the spouse of a professional contemplating a divorce in Louisville or Jefferson County Kentucky.
Business owners and/or the professional with an ownership in practice or a practice of their own will quickly realize that the methods used to establish valuation of a professional practice under Kentucky law do not necessarily reflect what may would consider to be the “fair market value” of the practice. The valuation will not be based upon some fictitious number established in the operating agreement or shareholders agreement of the practice.
It is right to be concerned about “double dipping” or the attempt by some to use the same “earnings” established in the valuation as a basis for calculating child support or maintenance.
The experienced divorce attorneys at Dodd & Dodd are not only in professional practice themselves, they have represented business owners and professionals including many attorneys and their spouses in divorce cases before Louisville family law courts for decades. It is important to work with highly skilled and experienced lawyers if you are considering a divorce which involves a professional practice or an interest in a business.
Kentucky case law has clearly established the methodology used to accurately establish the valuation of a professional practice or business during a Louisville divorce. The Court will usually base the value of the company or practice upon many factors including but not limited to the actual physical or fixed assets of the business, accounts receivable, earnings from work in progress as well as business which is completed but has not yet been billed.
“Goodwill” is a complex factor which must also be considered as part of the valuation process. Goodwill is basically the value which the individual professional represents to the unique capacity and ongoing ability to conduct the business as well as their relationship with customers, vendors and other professionals in the area.
It is important to protect your interests as well as the valuation of a professional practice or business during a Louisville divorce and to ensure your attorney has the experience, legal skill and business law knowledge to represent a professional or their spouse in a divorce. There will be tax implications for both parties and this will be an important element to consider during property division. We invite you to review the strong recommendations of our former clients and the legal industry and contact Dodd & Dodd or call 502-584-1108 to schedule an appointment with one of our attorneys.
