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Is a professional practice at risk in a Missouri divorce?

On Behalf of | Jun 3, 2024 | Family Law

People generally expect a degree of economic upheaval during a divorce. They know they have to pay for legal representation and time in court. They also understand that dividing their property is typically part of the process.

The more successful someone has been during a marriage, the more they may have at risk during a Missouri divorce. Those who have achieved career independence by starting their own professional practice may be quite proud of the business that they have developed. The entire family may benefit from an enhanced standard of living due to their professional success.

The business could be as valuable as the family home or possibly worth even more because of equipment, a well-established brand and real estate holdings. Does an accountant or another licensed professional with their own practice have to worry about the loss of their business in a Missouri divorce?

Business holdings can be marital property

Those running a small professional practice sometimes assume that the business is their separate property because they started it themselves or inherited it from a family member. They assume that its value shouldn’t factor into property division matters because their spouse couldn’t operate the practice without them.

However, many times a business that someone started during marriage is technically marital property. Even if they inherited it or started it before the marriage, which might make it separate property, they may have invested marital income or assets toward its improvement or maintenance. At least a portion of the company’s value may be subject to division in a Missouri divorce.

Thankfully, a 50/50 split of property isn’t the standard in a Missouri divorce. The goal is a just division of assets. Professionals often need to take great care when valuing their practice and reviewing financial requests from their spouses to ensure that proposed terms are reasonable. It is often possible to account for the marital value of a professional practice without actually putting the business itself at risk during a divorce.

The assumption of more marital debts or concessions in other areas of property division could help a successful professional maintain sole ownership of their professional practice during a Missouri divorce. Identifying personal priorities can help Missouri professionals protect what is most important to them accordingly.