Steps to Protect Your Professional Practice in a Utah Divorce
On behalf of Gregory W. Stevens, Attorney at Law on Thursday, April 2, 2020.
Skilled and educated professionals who finish their education and secure all necessary licensing often have the choice of either working for someone else as an employee or developing their own business or professional practice. There's more risk but also far greater potential income and freedom involved in starting your own professional practice.
Doing so successfully can be a point of personal pride, especially if you have so far been able to support your family with the business you've built. Whether you are an accountant or a physician, your professional practice likely represents not only your professional aspirations but also your future financial stability.
The thought of splitting up the ownership of a professional practice that you built through your own skill, investment and ability could seem very unfair during a pending divorce. Thankfully, depending on various factors, there are several ways in which you can protect your ownership in your professional practice during the asset division process in your Utah divorce.Can You Prove You Established the Practice Prior to Marriage?
In some ways, a business is a possession or asset that has a specific financial value and that represents a certain level of investment. When you use marital funds, meaning assets or income acquired during the marriage, to pay for personal professional development or the establishment of a professional practice, that arguably makes the business a shared or marital asset.
However, if there is a clear paper trail establishing that most financial investments made in the business occurred prior to marriage and involved your separate property, you may be able to claim the professional practice as separate property to avoid splitting it as part of the equitable division of your marital assets.Can You Resolve the Issue Without Going to Court?
If you can't establish the professional practice as separate property, maintaining direct control over the terms for the division of your property may be the best way to protect it. The ownership of a business and professional practice is a perfect example of a situation in which it may be more beneficial to file an uncontested divorce, potentially by going through mediation.
Mediation can help you and your spouse set your own terms for asset division, which means that you can focus on the terms that matter the most to you, such as maintaining sole ownership of your professional practice. Provided that you are willing to compromise in other areas, mediation could be a great way to protect your ownership of your professional practice.