Dentists, accountants, chiropractors and many other licensed professionals may choose to start their own professional practices. They become their own bosses and have the potential to derive more economic value from their hard work and professional abilities.
Developing a professional practice requires focus and sustained effort over many months. However, with time, professionals can establish a thriving practice where they act as their own bosses. The companies that they create represent value on their own, as well as a critical stream of regular income for the professional.
Successful professionals running their own practices may have unique challenges to overcome if they decide to divorce. What issues do professionals with their own businesses need to address?
1. Addressing spousal employment
In many cases, people running small businesses or professional practices employ their spouses. Continuing to work together during and after a divorce can be a source of conflict. Staff members may notice the tension between the spouses.
There is also reason to worry about misconduct that could damage the business in the long run. Professionals may need to have some difficult conversations with their spouses and may need to arrange for them to transition away from their current position with the business.
2. Preserving an ownership interest
Working together can be challenging during and after a divorce. So can maintaining joint ownership of the company. Even if the professional holds the business solely in their own name, it could be subject to division when they divorce as part of the marital estate.
Starting the practice during a marriage or investing marital income in the company could lead to the inclusion of the business and the inventory of marital assets. Professionals may need help determining what the company is worth and then developing a strategy that allows them to protect that value throughout the divorce process.
3. Navigating support requests
Perhaps there are young children in the family and child support is likely necessary. Maybe the spouse of the professional has never focused on their career but instead managed the family and performed basic tasks at the company as an employee.
They may not have the skills or professional experience necessary to support themselves after the divorce and could require spousal support. Calculating reasonable amounts of financial support can be difficult in scenarios where people run their own businesses and may have significant fluctuations in their income.
People with professional practices often need help as they begin strategizing for divorce and negotiating with their spouses regarding property division. Identifying key concerns early in the process can help people preserve their resources and rebuild their lives effectively after a complex divorce.