Divorce can be traumatic for anyone, regardless of what they do professionally, the size of their income and assets, and whether or not there are children involved.
But for a physician who has likely built a lucrative practice, your separation and divorce can be fraught with concerns, especially at the outset. Besides sorting through the often-searing emotional pain of separating from your spouse and children, there are equally deep worries about protecting the value of what may be your largest asset: Your practice.
That’s why this post covers a few of the most-important basics, a sort of Divorce 101 for Physicians. It will help you understand how the process will unfold over the next several months so that what now may seem alien or even frightening won’t be overwhelming.
Absent a pre-nuptial agreement, it’s vital to reach an accord quickly with your spouse on the terms of your separation. For one thing, it begins the legal process of creating two financial lives out of what previously had been a couple.
This binding “contract” is filed with the court and spells out things such as temporary child and spousal support, visitation rights, and custody until the divorce is final. As important, it creates a date for valuing your practice, an issue that will be crucial as the terms of your divorce are negotiated.
Now is the time to open individual bank accounts if you’ve had a joint account during the marriage. Likewise, if you were jointly responsible for, say, an unsecured line of credit, you should discuss with us and your banker establishing your own, individual line of credit and applying for credit cards in your name only.
All of this helps demonstrate to the court that you and your spouse truly began living separate lives. Dealing with mortgages on a primary residence or vacation home is more complex.
Protecting Your Practice
I’ve had divorcing physicians say to me, “I don’t want my ex to be a partner in my practice now that we’re splitting up.” This isn’t really a worry: What your spouse likely wants is their share of the value of the practice on the day you separated, not to be a “silent partner” in it through the years.
So it will have to be valued by a qualified business appraiser who has experience setting the worth of professional practices. (We can help you select such a person.) And this is why it’s important to have a separation agreement so the expert can fix the value as of a specific date.
Ongoing Financial Support
A judge will follow state guidelines for child support based on the children’s age and your income. But the issue of spousal support can become contentious.
The court will look at issues such as the length of the marriage, whether your spouse worked during it and, if not, what are his or her future employment prospects. While you won’t be expected to be the “meal ticket” for your ex during the rest of their life – or until they remarry – the court is likely to award support that allows your spouse to maintain the lifestyle they enjoyed during the marriage, at least long enough to re-establish a career, find a rewarding job, or return to school to learn a skill that makes them employable. In particular, this will be the case if supported the family by staying home to care for the children.
Each divorce is unique and requires a solution based on your specific circumstances. But this should give you a general idea about some of the unique issues you will face as a physician when you divorce. As family law practitioners, we can’t ease the emotional pain you may be feeling but we certainly can help ease the stress of resolving financial issues with your ex.
Kathy Newman has more than 35 years of experience in high-asset divorce and family law issues faced by physicians throughout the Twin Cities area. Kathy and her team understand the applicable laws and legal nuances involved, and welcome the opportunity to support you through the process. Read more from our Divorce blog for physicians.