Professionals in many different industries develop their own practices instead of working as employees for a business. Physicians, therapists, accountants, and even dentists may all have their own professional practices, which is essentially a small business.
Unlike a business, however, which can adapt to staffing changes as necessary, professional practice is useless without the educated professional providing the services to clients. You started a professional practice and have used the revenue generated from your efforts to support your family. Now, your spouse wants to claim your practice as marital property in an upcoming divorce.
Can your spouse really claim some of the value of a business solely in your name?
Is your professional practice vulnerable to division?
In a Colorado divorce, a couple either sets their own terms or asks a judge to make a ruling on their behalf. Even if you would like to negotiate your own settlement, understanding the rules that guide how judges split your property can help you negotiate for appropriate terms.
As an equitable distribution state, Colorado instructs judges to fairly divide property between spouses. Marital assets include anything acquired during the marriage or purchased using marital assets. If you started your professional practice during the marriage, then the chances are good that your spouse has at least some claim to a portion of its value.
Even if you already had a professional practice at the time of your wedding, any investments in the practice using marital income or assets might give rise to a claim. Many times, the financial value represented by businesses and professional practices is subject to division in a divorce. Reviewing when you started the business and what funds you have invested in it can help you clarify its position as marital or separate property.
Can you protect the company itself from claims?
Although you may have to agree to share extra assets with your spouse or even agree to spousal maintenance, you don’t inherently have to share the business with your ex. Advocating for your sole ownership of your professional practice after the divorce may be one of your top goals in the process.
Setting goals early will make it easier to negotiate with your ex or to build a case to protect your property from claims if you have to ask a judge to rule on the matter.