Ten Mistakes to Avoid When a Physician Files For Divorce

By Douglas R. York

Divorce inevitably entails a degree of drama and emotional upheaval. Physicians, no matter how rational and competent they may be in their medical careers, are not immune. But with careful thought and advance planning, a physician can get through a divorce with his or her practice and self-confidence reasonably intact, if he or she avoids the pitfalls listed here.

1.Do not consider a divorce without planning ahead. Consult an attorney to understand exactly what steps you need to take before you file. Most physicians, like most other people inexperienced in the nuances of divorce law, are not financial experts. That is not your primary business. An experienced attorney can alert you to exactly what you need to do to prepare for this major change in your life.

2. Do not ignore the critical need of getting the worth of your practice evaluated by a credentialed expert who has a track record in this highly specialized area. Obviously, in most cases, your medical practice will be your most valuable asset when it comes to the division of marital property. Medical real estate—the value of your office lease—may have to be assessed separately.

3. Don’t inform your spouse before you file for divorce. He or she may get the jump on you and file first. The person who files first gets to present his/her story to a judge and/or jury first—which is always a distinct advantage.

4. Don’t delay the divorce. Some physicians have postponed a divorce until after their stock in their practice has been fully vested or the practice has substantially increased in value—not intentionally, but just because divorce is hard and we are all inclined to procrastinate. They regretted not acting sooner. Every day that you are not divorced, you are essentially working for half price because the other half of your income will go to the spouse you are planning to leave.

5. Do not embark on the divorce process without informing your partners in your medical practice, because they could become involved in the process. They may want to restructure the practice to avoid undergoing an intrusive analysis of their own property and interest in the practice.

6. Do NOT give expensive presents to a third party before the divorce. Gifting third parties with valuable jewelry, cars, trips, etc., can be viewed as a “waste” of community property. Judges and juries may view such waste unfavorably and as a result, award a disproportionate amount of community property to your spouse as compensation.

7. This brings us to another important point: don’t assume that community property will always be divided 50/50. Judges are only required to divide community property in a fair and equitable way. It is not uncommon for property to be divided according to a 60/40 or even a 70/30 scenario. Much depends on the stories told and the impression both parties make on the judge.

8. Don’t fail to disclose all required information. Attempting to hide assets that are legitimately part of community property is highly inadvisable, possibly illegal, and can lead to special attention from the IRS. Most people have heard of “offshore” accounts and think it is easy to hide assets, but effective legal counsel and forensic CPAs (who examine business records in civil cases) are likely to ferret it out in the end.

9. Don’t fail to properly document and protect separate property, such as inherited property, or the value of a practice that was started before the marriage began. The burden of proof is on you to prove that certain assets should not be included in community property. If you don’t prove it, you could lose it.

10. Do not hire an attorney to represent you who has never, or rarely, handled a physician’s divorce before. There are many specialized issues involved, and you don’t want to put your fate in the hands of an attorney who is learning on the job at your expense!

A physician divorce can entail so many unique complications that the whole process may seem overwhelming at times. You may worry that your practice, and thus your future livelihood, will not emerge intact. But divorce, even a complex divorce, does not have to be a nightmare if you think ahead and plan ahead with the help of proven experts.

This article was written by Douglas R. York, an attorney based in Houston with 17 years’ experience in marriage dissolution, including multi-jurisdictional divorces involving highly complex legal issues.

This article offers legal information but not legal advice pertaining to specific, individual circumstances. No attorney-client relationship is formed with readers.