Divorce can be a difficult and daunting process for anyone, but for doctors and other licensed medical professionals, divorce can make for some very unique complications.
Whether you’re a family practitioner, an orthopedic surgeon, or a cardiologist (or married to one) a South Dakota divorce means you are likely to face challenges and considerations most other divorcing spouses do not. If that sets off any alarm bells, it's understandable - not only because your personal and financial future may be determined by the outcome of your case, but also because your professional career can be negatively impacted if things aren’t handled correctly.
Divorces Involving Doctors Are Different
Every divorce is different. However, divorce cases involving doctors and other health care professionals can pose a number of unique issues when it comes to reaching a workable resolution.
If you’re a doctor (or married to one) and are contemplating filing for divorce in South Dakota, here are a few practical considerations to think about:
- High net worth – Many doctors enjoy the fruits of their education and specialties, which is why many divorce cases involve high net worth estates. Larger marital estates, complex and varied investments, and other financial issues put more on the line when it comes to resolving matters like spousal support (alimony) and property division. This can also make for challenges when it comes to accurately valuing assets and debts, a task which often requires professionals skilled in tracing assets, property characterization, and effective means of negotiating or litigating resolutions.
- Complex assets – Having a large estate is one thing - but having many assets and different types of assets can create additional complications. It is common for doctors to enjoy time to themselves and hobbies they can call their own. Whether this includes various commercial or residential real estate properties, valuable antiques or collections, collectible cars or memorabilia, investment properties, ranches or farms, or other types of unique assets, the need for proper valuation and skillfully negotiated resolutions is often heightened. This is especially true if doctors are part of a professional practice and have complex financial assets related to employment benefits, retirement funds, profit-sharing plans, trusts, and more.
- Spousal support – Spousal support can be paid both during and after a case, so it’s important to carefully evaluate options for not only the amount of spousal support a recipient spouse may be eligible to obtain, but also options for alternative structures and resolutions, including disproportionate awards for certain assets and agreements where spousal support decreases over time.
- Medical degree support/reimbursement – Since becoming a doctor requires years of schooling, money, and support from loved ones, it is common for non-physician spouses to support their significant other as they pursue a degree. If one spouse supported the other in their pursuit of a medical degree, that support may become a consideration when it comes to spousal support, reimbursement, and property division. Spouses will need to evaluate when and how a doctor-to-be was supported as they went through school, internships, training, and situations where those supporting spouses later left their jobs to take care of a family after the other became a doctor.
For more information about high net worth divorces in South Dakota, click here.
Medical Practice: Professional Assets and Valuations
One of the greatest challenges associated with divorces involving doctors is the ownership of professional practices. Valuing a medical practice, complying with applicable laws and regulations, and sifting through dense and detailed documentation is often not easy.
For example, issues involving a medical practice may include considering several factors in order to resolve issues such as property division, spousal support, and more. These may include:
- What are we dealing with? What type of practice is involved (solo practice, partnership, or group), what type of entity does a practice operate as, are both spouses doctors, do they practice together, etc.?
- What about finances and debts? How is the practice financed and are there existing obligations, potential claims for reimbursement, or other factors to consider for the purpose of division?
- Are there contracts and agreements? Some contractual agreements (like buy-sell agreements, partnership/shareholder contracts, etc.) could impact a divorce, as can contracts like pre-nuptial or post-nuptial agreements.
- Are there future considerations? Are there stock options, profit-sharing plans, future vesting of stock, or ownership rights a doctor may be entitled to after the divorce?
Valuations need to address the unique characteristics of a medical practice, including:
- “Personal goodwill” of the practice;
- Liabilities, including any insurance-related expenses, taxes, and contributions to loans or retirement/benefit plans; and
- A practice’s location and its historic profitability.
For more information about business valuations in a South Dakota divorce, click here.
Other Important Considerations
Being open with your attorney is the most effective way to ensure you’ll receive the personalized counsel you need. Failing to disclose potential issues which may arise can only make for surprises and increase the risk of poor outcomes that could have been prevented. This means discussing what’s relevant to your case, such as any:
- problems with finances or the practice;
- professional disciplinary actions;
- contractual agreements between partners and practice owners (such as agreements that may stipulate the forfeiture of stock but allow for buying back that stock after a divorce); and
- other funding, financial, and liability-related issues.