Dealing with your practice during a divorce

On Behalf of | Sep 13, 2023 | Divorce, Trusts

If you get divorced, your Oregon medical practice may be considered a marital asset for property division purposes. This means that your spouse may be entitled to a portion of any profits it generates or proceeds from an eventual sale. Of course, there are a variety of ways that you may be able to protect the asset from being ceded to your spouse.

Put the practice in a trust

Putting your practice in a trust means that it is held outside of the marital estate. Therefore, your spouse has no claim to it during a divorce proceeding. An exception may be made if a judge finds you created the trust in bad faith. This typically means that it was created just before initiating divorce proceedings. In such a scenario, it will likely be wholly or partially invalidated.

Create a buy/sell agreement

A buy/sell agreement stipulates what happens if you were to surrender your ownership stake in the practice. The agreement will define who can buy your stake in the firm and how much it is worth. Your spouse may be barred from becoming an owner of the firm even if such a document doesn’t exist if he or she lacks a medical license.

Give your spouse other marital assets

It may be possible to keep your firm after a divorce even if your spouse legally has a right to it. This may be done by negotiating to keep control of the firm in exchange for full ownership of other assets, such as the family home, a car or an art collection. You may also agree to pay more in alimony to keep full control of your business.

Keeping your practice may be just as important for your patients as it is for you. If you have to close, dozens of people may not be able to get the care that they need. Furthermore, you may be unable to make up income lost from selling or closing your practice for good.