If you run a GP or dental practice with your partner and decide to divorce, what happens? In this article we discuss what you can do.
The relationship between partners in a partnership is an important one – running a partnership with someone requires a significant level of trust. The stakes can be high, particularly in terms of finances. If your marriage breaks down and you are a partner in a business, particularly in a GP practice or a dental practice, there will be additional considerations beyond the division of the family home, and the sharing of a pension.
These additional considerations will require specialist legal advice – it is not just your position which you need to think about, but that of the partnership and your partners.
How can you protect your practice on divorce?
Partnership Agreement
It will help if there is a partnership agreement in place – very often there will be and it will be important to provide your matrimonial solicitor with a copy of this document, as it can provide further information about how the partnership assets are held, for example.
If there is no partnership agreement in place, it will be particularly important for your partners to take legal advice as early as possible. Even where there is an express agreement, business decisions can be made which muddy the waters.
Valuation of Assets
It will also be necessary to ascertain the value of the practice’s assets – unlike many businesses, there are rules and restrictions on goodwill being assigned to GP practices, for example, so it will be important to ensure that the partnership is valued by someone who is qualified and experienced to do so.
The existing partnership accounts will be a good place to start, but are likely to need to be brought up to date as part of the financial disclosure process within matrimonial proceedings.
Dental practices, on the other hand, can have a goodwill value, and considering the goodwill will require a skilled and experienced professional. This is particularly relevant with dental practices being so impacted by the Coronavirus pandemic.
Income Evaluation
It will also be important to ascertain the current and anticipated levels of income. It is best to involve the partnership accountant as early on as possible in the matrimonial proceedings, as they will often be best placed to advise on the past, present and future partnership profit and associated income for each of the partners.
This can have a bearing on a number of matrimonial issues including borrowing capacity, affordability of settlement options and the appropriateness of spousal maintenance payments.
If of course your spouse is another partner in the practice then there will an even greater number of issues to consider.
What are your next steps?
If you are concerned about how your divorce may impact you and the other partners in your practice, it is important that you seek legal advice as soon as possible.
Equally, if you are a partner in a GP or dental practice, and you do not have a partnership deed in place, it is important that you speak to our Corporate Team to ensure that the position of you and your partners is protected, should any of you find yourselves in a position of matrimonial breakdown in the future.
This article is part of a series of articles for medical professionals. Other articles include: