Attorney
A couple decades ago, private equity figured something out that many professionals, like physicians, dentists, CPAs, and architects are just now wrapping their heads around: at its core, a practice is just another business.
The patient or client relationships, the recurring revenue, the systems, the reputation built over years of showing up and doing good work all have real, transferable value. PE firms have spent the last decade buying up practices across the country precisely because of that value.
You may have watched this happen in your own field and had complicated feelings about it. You aren’t just a cog in a machine. You went into medicine, or dentistry, or accounting, or got some other professional license because of something more than a return on investment. So, the idea that a group of investors could look at what you’ve spent a lifetime building and see an acquisition target is unsettling.
Here’s the uncomfortable parallel: in a New Mexico divorce, your spouse’s attorney may be looking at your practice through a very similar lens.
Is Your Profession Another Possession Subject to Division at Divorce?
Most physicians, dentists, architects, or CPAs would never consider their profession a possession. The work is who you are as much as it is what you do.
But because your practice is an income generating entity, it is considered an asset during a divorce. And because New Mexico is a community property state, its value may be subject to division during divorce.
Under our state’s divorce laws, most assets and the value they accumulate during a marriage may belong equally to both spouses, regardless of whose name is on the door or whose license is on the wall. If your practice was started, or grew during your marriage, your spouse may have a legitimate ownership interest in it.
This isn’t a punishment or a legal technicality designed to catch professionals off guard. It’s the foundational principle of how New Mexico treats marital wealth: what’s built together is owned together. This recognizes the value added by a supportive spouse, and theoretically prevents people from staying in an unhappy marriage for financial reasons.
Putting a Pricetag on a Practice
Thanks to New Mexico’s community property laws, the question isn’t whether your practice has value in a divorce. It almost certainly does.
The real questions are how that value is measured, how much of that value should be considered marital property, and whether you can protect the practice’s ability to keep operating while the value of the marital property is divided up.
These are questions Attorney Bob Matteucci is uniquely equipped to answer. Bob is not just a seasoned family law attorney. He’s also a former business owner. In fact, it was his experience going through the divorce process as a business owner that inspired him to join the legal profession.
Bob isn’t afraid to get into the weeds when it comes time to figure out the tricky financial questions that arise when someone who operates a professional practice must get divorced.
This means thinking about:
- Whether it makes sense to value the practice by determining what a willing buyer would pay for it, or calculating how much income it generates and going from there.
- How much of the practice’s value was created during the marriage or because of the financial, physical, or emotional support of one or both spouses.
- The value of goodwill and reputation. Some of the practice’s value comes from its name, its systems, its patient or client base, its location. Other value comes from the hard work you have put in, and it would follow you or evaporate if you left the practice. The former is marital property, the latter is generally not.
Once the value of the marital portion of the practice is calculated, it must then be divided up. The goal in most of the cases Bob works on is keeping the practice intact and operating without disruption.
This is typically accomplished at the negotiating table. Oftentimes, the spouse who has not worked at the practice receives their share of the practice’s value by taking a larger share of other assets, accepting adjusted spousal support payments (aka alimony), or other creative options. These solutions are designed to keep the doors open and placate licensing boards (who absolutely DO NOT consider a professional license to be marital property).
Serving Families with Dignity & Compassion
If you’re a physician, dentist, attorney, CPA, or other licensed professional in New Mexico, your practice is going to play a role in your divorce. Working with an attorney like Bob Matteucci, who has a nose for numbers as well as years of experience working as a family law attorney, can help you move forward financially without feeling like you are facing a hostile takeover. Contact Matteucci Family Law today to set up a meeting.