Medical doctors in San Diego have the potential to earn a lucrative income and cultivate a successful business, but they also tend to work long hours and carry a great deal of stress around with them, and as such, the medical profession has some of the highest divorce rates in the country. Unfortunately, divorce cases involving medical professionals, business owners and other high net worth individuals with significant income and assets can be extremely complicated, due in large part to the complex division of marital property. These types of divorce cases require a great deal of pre-planning and a solid, strategic approach to ensure a favorable outcome. Whether you are a general practitioner, a psychiatrist, a surgeon or another type of medical doctor, your career can have a significant impact on the outcome of your divorce proceeding. At (619) Divorce, our San Diego divorce attorneys have the skill and experience necessary to help you get the best possible outcome in your divorce, and we will handle any complex issues arising out of your divorce in a competent and efficient manner.
TABLE OF CONTENTS
- Divorce for Medical Doctors in San Diego
- Common Issues Affecting Medical Doctors in Divorce
- Medical Practice Valuation in a San Diego Divorce
- How a Skilled Medical Doctor Divorce Lawyer Can Help
- Consult Our San Diego Medical Doctor Divorce Lawyers
DIVORCE FOR MEDICAL DOCTORS IN SAN DIEGO
If you are a medical doctor in San Diego and you attended medical school and opened your practice after getting married, the financial value of your practice or the amount the practice increased in value during the course of your marriage could be subject to division if you and your spouse end up getting a divorce. Even if you already had a thriving medical practice prior to your marriage, if your spouse gave up a potentially promising career to allow you to further your own career, or worked at the practice at a reduced pay rate or without pay, he or she may be entitled to reimbursement rights for “community contributions to education or training,” or a share of the value of the practice, if you dissolve your marriage.
COMMON ISSUES AFFECTING MEDICAL DOCTORS IN DIVORCE
A key issue that medical doctors face in divorce is the division of their marital assets, which can be extremely complicated in cases where the physician owns a medical practice or belongs to a partnership or group practice, or in cases where the non-physician spouse contributed in some way to the physician’s education or professional license. Say for instance, one spouse pursues a medical degree during the marriage and goes on to become a medical doctor, while the other spouse stays home to raise the couple’s children or takes on low-paying jobs to help pay the bills during medical school. If the couple decides to get a divorce after the former spouse becomes a successful doctor, the non-physician spouse may feel entitled to compensation for the years of sacrifice and support that went into helping the medical doctor achieve his or her professional goals and obtain a valuable professional license to practice medicine.
CALIFORNIA COMMUNITY PROPERTY LAWS
Under California law, all assets and property acquired by the couple during marriage or paid for with marital funds is considered community property. In standard high-asset divorces in San Diego, community property typically includes real estate, retirement accounts, stock options, trusts, pensions, family businesses and other valuable marital assets, but in a medical doctor’s divorce, any business interests the doctor may have, such as a lucrative medical practice, may also be considered community property. According to the law, community property belongs to both spouses equally and must be divided equitably in divorce, and when a medical practice is part of the couple’s community property, it is imperative that a complete analysis and appraisal of the practice is conducted before the property is divided in a divorce. While a medical doctor’s professional education and license are not community property assets that can be physically divvied up in divorce, the non-physician spouse may be entitled to reimbursement for so-called “community property contributions” that substantially increased the earning capacity of the doctor, or a share of the value of the medical practice, if it was started during the marriage, with marital funds, or if the non-physician spouse contributed to the practice in some way or helped it grow. In other words, if your spouse supported your education for a medical degree and/or professional license, the court may compensate your spouse for losing the medical practice to divorce. It is important to note that a spouse who is not a physician cannot own a medical practice in San Diego, and therefore cannot take over a share of a medical practice as part of a divorce settlement. Rather, the divorcing spouses would be required to agree to a financial settlement based on the value of the practice and any other considerations, such as the non-physician’s community property contributions, a topic discussed in further detail below.
CALIFORNIA FAMILY CODE § 2641 – DIVISION OF PROPERTY & REIMBURSEMENTS
If you are a medical doctor getting a divorce in San Diego, you may be wondering how your divorce will affect your medical practice and related assets. California Family Code § 2641, the law governing reimbursements for community contributions to education or training states: (b) Subject to the limitations provided in this section, upon dissolution of marriage or legal separation of the parties:
(1) The community shall be reimbursed for community contributions to education or training of a party that substantially enhances the earning capacity of the party. The amount reimbursed shall be with interest at the legal rate, accruing from the end of the calendar year in which the contributions were made.
(2) A loan incurred during marriage for the education or training of a party shall not be included among the liabilities of the community for the purpose of division pursuant to this division but shall be assigned for payment by the party.
According to this law, “‘Community contributions to education or training’ as used in this section means payments made with community or quasi-community property for education or training or for the repayment of a loan incurred for education or training, whether the payments were made while the parties were resident in this state or resident outside this state.” What this means is, a spouse may be entitled to a dollar for dollar reimbursement for all marital funds paid toward the education of the medical doctor, with certain exceptions. These exceptions may include the following situations:
- The community has substantially benefited from the education, training, or loan incurred for the education or training of the party.
- The education or training received by the party is offset by the education or training received by the other party for which community contributions have been made.
- The education or training enables the party receiving the education or training to engage in gainful employment that substantially reduces the need of the party for support that would otherwise be required.
MEDICAL PRACTICE VALUATION IN A SAN DIEGO DIVORCE
If you and your spouse decide to go your separate ways and your medical practice is determined by the court to be community property, it may be subject to division in your divorce. Marital property division is a normal part of virtually every divorce, particularly high-asset divorces, but while certain marital assets, such as mutual funds and retirement plans, can be valued and divided relatively easily, determining the proper value of a medical practice is far more complicated. Depending on the circumstances of your case, valuating your medical practice may involve calculating the fair market value of the tangible aspects of the practice, including real estate, equipment, furnishings and supplies, as well as the value of accounts receivable, and valuing the medical practice’s “goodwill.” The term goodwill refers to the sum of the intangible qualities of a medical practice, or the value of the practice above and beyond the hard assets and accounts receivable. Once your medical practice has been accurately valued, your spouse will be awarded his or her share of whatever the value of the practice is determined to be, taking into considering the fair market value of the practice, appreciation, the value of the equipment and property, tax consequences and whether the goodwill of the practice is community property.
HOW A SKILLED MEDICAL DOCTOR DIVORCE LAWYER CAN HELP
When a couple gets married, they typically do so with the expectation that they will enjoy a long and happy life together, and that being the case, one spouse may be happy to sacrifice his or her professional career in order to help the other spouse achieve his or her professional goals. However, statistics show that one in three married physicians end up getting divorced and if the couple in this example decides to dissolve their marriage, the non-physician spouse may claim partial ownership of the value of the medical doctor’s practice. Valuing and dividing a medical practice during a San Diego divorce often results in a significant windfall for the non-physician spouse and a considerable financial loss for the physician.
If you are a medical professional with significant assets you acquired before or during your marriage, and you are getting a divorce in San Diego, it is imperative that you hire a divorce attorney who understands the unique challenges you face in your divorce and the potential pitfalls of failing to accurately value your medical practice. The main goal of our divorce attorneys at (619) Divorce is to help you successfully protect your assets while maintaining control of your medical practice, and we will also help guide you through other critical divorce-related issues, such as spousal support, child custody, visitation rights and child support. Your medical practice may be one of the most valuable assets in your marital estate and our attorneys at (619) Divorce understand the importance of conducting an accurate analysis and appraisal of the practice to ensure a fair division of your marital property during your divorce. If necessary, we can call on forensic accountants, business appraisers and other financial experts to assist us in taking a fair inventory of your medical practice, so we can effectively negotiate a settlement agreement that is in your best interest.
CONSULT OUR SAN DIEGO MEDICAL DOCTOR DIVORCE LAWYERS
Medical doctors and other professionals in San Diego typically have the most assets to protect and therefore have the most to lose in divorce if they don’t have a competent and aggressive divorce attorney fighting for their rights in court. We understand that you worked hard to earn your medical license and build your practice, and we will do everything in our power to ensure that you maintain control of your medical practice and assets. If you are a medical doctor and you or your spouse has filed for divorce in San Diego, your first course of action should be to hire a reputable attorney with experience handling divorces for medical doctors. Our skilled legal team at (619) Divorce has more than a decade of experience protecting the rights of medical doctors and business owners in divorce, and we can help you get a satisfactory result in your divorce proceeding.