Title: McReath v. McReath

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2011 WI 66 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2009AP639 
COMPLETE TITLE: 
In re the marriage of: 
 
Tracy J. McReath, 
          Petitioner-Respondent, 
     v. 
Timothy J. McReath, 
          Respondent-Appellant-Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2010 WI App 101 
Reported at:  329 Wis. 2d 155, 789 N.W. 2d 89 
(Ct. App. 2010 – Published) 
 
 
OPINION FILED: 
July 12, 2011   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
April 13, 2011 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Sauk 
 
JUDGE: 
James Evenson 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the respondent-appellant-petitioner there were briefs 
by Andrew W. Erlandson and Hurley, Burish & Stanton, S.C., 
Madison, and oral argument by Andrew W. Erlandson. 
 
For the petitioner-respondent there was a brief by Richard 
J. Auerbach and Auerbach & Porter, S.C., Madison, and oral 
argument by Richard J. Auerbach. 
 
 
 
2011 WI 66
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2009AP639 
(L.C. No. 
2007FA208) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In re the marriage of: 
Tracy J. McReath, 
 
          Petitioner-Respondent, 
 
     v. 
 
Timothy J. McReath, 
 
          Respondent-Appellant-Petitioner. 
 
FILED 
 
JUL 12, 2011 
 
A. John Voelker 
Acting Clerk of Supreme 
Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
PATIENCE DRAKE ROGGENSACK, J.   We review a published 
opinion of the court of appeals1 affirming the circuit court's 
order2 that Timothy McReath (Tim) pay Tracy McReath (Tracy) 
$796,720 to equalize the property division upon the couple's 
divorce, as well as $16,000 per month for 20 years in 
maintenance.  The questions presented are:  (1) whether the 
                                                 
1 McReath v. McReath, 2010 WI App 101, 329 Wis. 2d 155, 789 
N.W.2d 89. 
2 The Honorable James Evenson of Sauk County presided. 
No. 
2009AP639   
 
2 
 
entire value of the salable professional goodwill3 of Tim's 
interest in Orthodontic Specialists, S.C. can be counted as 
divisible property in a marital estate, and (2) if the answer to 
the first question is yes, did the circuit court double count 
the 
value 
of 
the 
professional 
goodwill 
in 
Orthodontic 
Specialists when it based Tracy's maintenance award on Tim's 
expected future earnings from Orthodontic Specialists. 
¶2 
We 
conclude 
the 
entire 
value 
of 
the 
salable 
professional goodwill was properly counted as divisible property 
in the marital estate.  Moreover, we conclude that the circuit 
court did not double count the professional goodwill from 
Orthodontic Specialists in the maintenance award.  Accordingly, 
we affirm the decision of the court of appeals. 
I.  BACKGROUND 
A.  Facts 
¶3 
This case requires us to review the circuit court's 
order dividing marital property and awarding maintenance in a 
divorce proceeding.4  Tracy and Tim were married on August 27, 
                                                 
3 Professional goodwill is the goodwill that is attendant to 
a professional business.  See infra ¶28.  As discussed below, 
for the purpose of property division, some courts and scholars 
divide professional goodwill into two components:  "personal 
goodwill" and "enterprise goodwill."  See infra ¶¶38-39.  For 
reasons set forth below, see infra ¶¶39-41, we do not divide 
professional goodwill.  Therefore, when discussing "professional 
goodwill" throughout this opinion, we are referring to both 
components of professional goodwill.    
4 The majority of the facts set out below are taken from the 
thorough factual findings set forth by the circuit court.  When 
we derive facts from elsewhere in the record, we so note. 
No. 
2009AP639   
 
3 
 
1988.  Three children, all of whom were minors at the time the 
divorce proceedings were initiated, were born of their marriage.5 
¶4 
In 1991, Tim received his dental degree, and in 1993, 
he received a master's degree in orthodontia.  Accordingly, most 
of Tim's dental education was pursued during the marriage.  Tim 
took out student loans to fund his education, all of which were 
repaid with marital funds.   
¶5 
Upon receiving his masters in orthodontia, Tim worked 
as an associate at Orthodontic Specialists for two years.  Tim 
then purchased the Baraboo and Portage locations of Orthodontic 
Specialists from Dr. Grady.  
¶6 
Tim paid approximately $930,000 for the two locations 
of Orthodontic Specialists.  A portion of this purchase price 
was attributed to a noncompete agreement that Dr. Grady signed 
and to transitional services that Dr. Grady provided Tim.  
Specifically, Tim testified that $100,000 was for the physical 
assets, corporate name, and corporate goodwill.  The remaining 
$830,000 was for, as Tim described, "Dr. Grady's name, the 
noncompete clause, and the employment agreement that Dr. Grady 
would stay on to introduce me to his existing patients, [and] to 
counsel me through the process of learning how to do business."   
¶7 
With regard to the noncompete agreement, Tim testified 
that he would not have purchased Orthodontic Specialists for as 
high of a price as he did without a noncompete agreement 
                                                 
5 The McReaths' eldest child has since reached the age of 
majority. 
No. 
2009AP639   
 
4 
 
because, "[Dr. Grady] could have just opened up a business just 
down the street and I'm assuming that he would have taken not 
only the majority of patients with him but the majority of the 
future patients in the area."  Tim also testified that he was 
not aware of any transaction in the field of orthodontics, for 
any substantial value, that took place without a noncompete 
agreement.  According to Tim, "the name of the practitioner is 
always weighted very heavily as opposed to the goodwill or the 
value of the name of the practice or corporation." 
¶8 
Tim has worked as the sole owner of Orthodontic 
Specialists since he purchased it from Dr. Grady.  Tim has 
historically 
averaged 
a 
60-hour 
work 
week. 
 
This 
is 
significantly more than the average orthodontist who works only 
35 hours per week.  Recently, Tim has reduced the number of 
hours he works to approximately 45 hours per week.  Tim has no 
plans to sell or dispose of his practice.   
¶9 
Tim has been very successful in operating Orthodontic 
Specialists.  His annual gross business revenues in the five 
years leading up to the divorce ranged from $1.6 million to in 
excess of $1.8 million.  In the same five years, Tim received an 
average yearly net cash flow from Orthodontic Specialists of 
No. 
2009AP639   
 
5 
 
$697,522.6  Notably, Orthodontic Specialists maintains the only 
orthodontic offices in Baraboo and Portage.   
¶10 The success of Orthodontic Specialists has resulted in 
a relatively high standard of living for the McReath family.  
They have significant assets and little, if any, personal debt.  
¶11 Unlike Tim, Tracy does not have a professional degree.  
She is a high school graduate with some college credits, but no 
college degree.  Tracy worked outside the home while Tim was 
attending dental school.  Throughout much of their marriage, 
however, Tracy worked as a homemaker and the primary caretaker 
for the couple's children.  Specifically, she was completely out 
of the workforce from 1993 to 2000.  From 2000 to 2008, she 
performed some financial and clerical duties for Orthodontic 
Specialists.  In this position, she was paid $15,000 to $16,000 
per year.  The circuit court found Tracy has a current earning 
capacity of $14.50 per hour, or $30,160 annually. 
B.  Procedural History 
¶12 On May 16, 2007, Tracy filed a petition for divorce in 
Sauk County Circuit Court.  Upon entering the order of divorce, 
                                                 
6 The circuit court found the income calculations conducted 
by Tracy's expert to be correct, and rejected those conducted by 
Tim's expert.  The circuit court's finding that Tim's expert had 
made an incorrect income valuation was based on the fact that  
Tim's expert limited his calculations to one year, 2007, which  
happened to be the worst financial year for Tim in the preceding 
five years.  On appeal, Tim does not challenge the income 
calculations adopted by the circuit court.   
No. 
2009AP639   
 
6 
 
the circuit court, among other things, divided the marital 
property and awarded maintenance to Tracy.7  
¶13 Regarding the marital property division, with the 
exception of the value of Orthodontic Specialists, the parties 
stipulated to the value of their marital assets.  They also 
stipulated to a division of assets with a balancing payment.  
Hearings were held on the appropriate fair market valuation of 
Orthodontic 
Specialists, 
and 
resulted 
in 
a 
valuation 
of 
$1,058,000.  This was the value given by Tracy's expert, Craig 
Billings (Billings).  The court rejected the $415,000 valuation 
of Tim's expert, Dennis Ksicinski (Ksicinski).8   
¶14 Having valued Orthodontic Specialists at $1,058,000, 
the court turned to dividing the assets.  The court found that 
                                                 
7 The parties entered into a stipulated agreement regarding 
the custody and physical placement of their three children. 
8 In accepting Billings' valuation, the court highlighted 
that Billings had "provided a comprehensive and thorough 
evaluation" 
of 
the 
business 
and 
"[h]is 
conclusions 
were 
supported by direct work with the practice including a site 
visit or visits, conversations with [Tim, a] review of the 
financial records" and "external information sources unique to 
the profession such as surveys and professional journal data." 
The court found Ksicinski's valuation problematic because, 
among 
other 
things, 
Ksicinski 
relied 
significantly 
on 
information provided by Tim and did little independent or 
critical analysis; Ksicinski used only financial data from 2007 
(one of Orthodontic Specialists' worst financial years in terms 
of net income) in making his valuations; Ksicinski did not look 
to 
outside 
sources 
and 
industry 
norms 
to 
support 
his 
conclusions; and Ksicinski's valuation was not supported by the 
record given the fact that Tim had bought the practice in the 
1990s for over $900,000 and the business grossed in excess of 
$1.6 million per year. 
No. 
2009AP639   
 
7 
 
there was no reason to deviate from the presumption of equal 
property division in Wis. Stat. § 767.61(3) (2009-10).9  It then 
combined the $1,058,000 valuation of Orthodontic Specialists 
with the other, stipulated to, assets in the marital estate.  
Because, among other assets, Tim was the stipulated owner of 
Orthodontic Specialists, Tim's total assets exceeded Tracy's by 
$1,593,440.  As such, to equalize the property division, the 
court awarded Tracy $796,720, to be paid at the rate of no less 
than $80,000 per year plus accrued interest. 
¶15 Next, to set maintenance, the court used Tim's average 
annual earnings from Orthodontic Specialists over the preceding 
five years, i.e., $697,522.  However, because the $697,522 
salary was based on Tim working 50-70 hours per week, the court 
adjusted 
the 
figure 
to 
reflect 
a 
40-hour 
work 
week.  
Consequently, the court set Tim's expected annual income from 
Orthodontic Specialists at $465,000 (rounded).  Next, the court 
took its finding that Tracy had a current earning capacity of 
$14.50 per hour, or $30,160 annually.  The court then added 
these income calculations to the other sources of income 
available to the parties, specifically rental and investment 
income, and found that Tim's total annual income was $535,806 
(or $44,650/month) and Tracy's total annual income was $75,944 
(or $6,328/month).  
                                                 
9 All subsequent references to the Wisconsin Statutes are to 
the 2009-10 version unless otherwise indicated. 
No. 
2009AP639   
 
8 
 
¶16 With these figures in hand, the court considered the 
statutory factors set forth in Wis. Stat. § 767.56 in deciding 
whether to award maintenance.10  In considering these factors, 
the court found that it was unlikely that Tracy would ever have 
Tim's earning capacity or an income that would allow for a 
standard of living comparable to that enjoyed during the 
marriage.  The court also underscored that Tracy had contributed 
to the dental education and increased earning capacity of Tim.  
Based on these findings, the court awarded Tracy maintenance in 
the amount of $16,000 per month for a period of 20 years. 
¶17 Tim appealed and the court of appeals affirmed.  
McReath v. McReath, 2010 WI App 101, 329 Wis. 2d 155, 789 N.W.2d 
89.  Tim argued that the circuit court erred as a matter of law 
when 
it 
treated 
his 
personal11 
goodwill 
in 
Orthodontic 
Specialists as divisible property.  Id., ¶1.  The court of 
appeals affirmed on the basis that the personal goodwill was 
salable, as evidenced by the fact that Tim himself had paid for 
the 
personal 
goodwill of Dr. Grady when he bought the 
orthodontic practice and the reality that any hypothetical buyer 
would demand a noncompete agreement.  Id., ¶¶17-18.  Because 
                                                 
10 See infra note 17 and the accompanying text for a list of 
the Wis. Stat. § 767.56 factors and a discussion of maintenance 
awards in Wisconsin.   
11 The 
court 
of 
appeals 
uses 
the 
term 
"professional 
goodwill" to describe what we later discuss as "personal 
goodwill," and the term "corporate goodwill" to describe what we 
later discuss as "enterprise goodwill."  See infra section II.B.  
To avoid confusion, we use the terms we employ herein to 
describe the court of appeals decision. 
No. 
2009AP639   
 
9 
 
there is no rule excluding salable goodwill from divisible 
property, the court of appeals concluded that the circuit court 
did not err when it included personal goodwill in the marital 
estate.  Id., ¶19. 
¶18 Additionally, Tim argued that the circuit court 
improperly double counted his personal goodwill in Orthodontic 
Specialists.  The goodwill, he averred, was counted first when 
it was considered a divisible asset.  It was then counted a 
second time when maintenance was awarded based on his earning 
capacity that was calculated, in part, using his personal 
goodwill.  Id., ¶32.  The court considered three alternatives to 
address Tim's double counting concerns.  First, as suggested by 
Tim, circuit courts could exclude all personal goodwill, 
regardless of whether it is salable, from property division.  
Id., ¶¶35-46.  The court rejected this alternative.  Id., ¶46.  
Second, also suggested by Tim, circuit courts could include 
salable personal goodwill in divisible property, and then 
compensate by making a downward adjustment when awarding 
maintenance.  Id., ¶¶47-49.  The court also rejected this 
alternative.  Id., ¶49.  
¶19 Third, the court considered Tracy's suggested approach 
that it characterized as:  "include all salable goodwill, both 
[enterprise] and [personal], as a divisible asset and then, 
essentially, ignore the fact that Tim's earnings are intertwined 
with part of the divisible assets."  Id., ¶50.  Having rejected 
the two approaches advocated by Tim, the court adopted Tracy's 
approach, opining that there was no "existing rule precluding 
No. 
2009AP639   
 
10 
 
this approach."  Id.  Accordingly, the court of appeals affirmed 
the property division and maintenance awarded. 
¶20 We granted review and now affirm the court of appeals. 
II.  DISCUSSION 
A.  Standard of Review 
¶21 The division of marital property and the calculation 
of 
maintenance 
are 
matters 
typically 
left 
to 
the 
sound 
discretion of the circuit court.  Rohde-Giovanni v. Baumgart, 
2004 WI 27, ¶17, 269 Wis. 2d 598, 676 N.W.2d 452; Cook v. Cook, 
208 Wis. 2d 166, 171, 560 N.W.2d 246 (1997).  We do not disturb 
a circuit court's discretionary determinations about property 
division and the calculation of maintenance unless the court 
erroneously exercised its discretion.  Rohde-Giovanni, 269 
Wis. 2d 598, ¶17.  A circuit court erroneously exercises its 
discretion if it makes an error of law.  Id., ¶18.  The issues 
presented here concern whether the circuit court applied 
incorrect legal standards in dividing marital property and 
calculating maintenance.  
¶22 When an issue of law arises while we are reviewing a 
circuit court's exercise of discretion, we review that issue 
independently, but benefiting from the analyses of the court of 
appeals and circuit court.  Id., ¶19; Marder v. Bd. of Regents 
of the Univ. of Wis. Sys., 2005 WI 159, ¶19, 286 Wis. 2d 252, 
706 N.W.2d 110.  Moreover, in deciding legal issues, we uphold 
the circuit court's findings of fact unless they are clearly 
erroneous.  Phelps v. Physicians Ins. Co. of Wis., Inc., 2009 WI 
74, ¶34, 319 Wis. 2d 1, 768 N.W.2d 615.  "[T]he valuation of 
No. 
2009AP639   
 
11 
 
marital assets is a finding of fact."  Liddle v. Liddle, 140 
Wis. 2d 132, 136, 410 N.W.2d 196 (Ct. App. 1987).  
B.  Marital Estate and Goodwill 
¶23 Chapter 767 of the Wisconsin Statutes, "Actions 
Affecting the Family," sets forth how a presiding court should 
divide the marital estate upon divorce.  Wisconsin Stat. 
§ 767.61(1) requires the court to divide the property of the 
parties upon divorce.  Section 767.61(2) identifies property 
that is subject to division by describing the limited types of 
property that generally are not subject to division on divorce.12  
The property subject to division is considered the marital 
estate for purposes of property division upon divorce.  Steinke 
v. Steinke, 126 Wis. 2d 372, 380, 376 N.W.2d 839 (1985).   
                                                 
12 Excluded property includes: 
property shown to have been acquired by either party 
prior to or during the course of the marriage . . .:  
1. 
As a gift from a person other than the other 
party.  
2. 
By 
reason 
of 
the 
death 
of 
another, 
including, 
but 
not 
limited 
to, 
life 
insurance 
proceeds; payments made under a deferred employment 
benefit plan, as defined in s. 766.01(4)(a), or an 
individual retirement account; and property acquired 
by right of survivorship, by a trust distribution, by 
bequest or inheritance or by a payable on death or a 
transfer on death arrangement under ch. 705 
3. 
With funds acquired in a manner provided in 
subd. 1. or 2.  
Wis. Stat. § 767.61(2)(a).  If excluding this property "will 
create a hardship on the other party or on the children of the 
marriage," the court may nonetheless divide the property in a 
"fair and equitable manner."  § 767.61(2)(b).  
No. 
2009AP639   
 
12 
 
¶24 When engaged in dividing the marital estate, a circuit 
court is to proceed under the presumption of equal division.  
Wis. 
Stat. 
§ 767.61(3). 
 
Dividing 
the 
estate 
equally 
"effectuates the policy that each spouse makes a valuable 
contribution to the marriage and that each spouse should be 
compensated for his or her respective contributions."  Steinke, 
126 Wis. 2d at 380-81.  We have explained the rationale behind 
equal division when one spouse leaves the work force to care for 
the couple's domestic needs: 
Part of the rationale in creating the presumption of 
equal property division is that the homemaking partner 
has 
contributed services which have enabled the 
financially supporting partner to achieve his or her 
station in life, and in so doing the homemaking 
partner has lost ground in the job market. 
Id. (internal quotation marks and citation omitted).  Despite 
the presumption of equal division, the court has the discretion 
to alter the distribution after considering numerous factors.13 
                                                 
13 Those factors, enumerated in Wis. Stat. § 767.61(3), are: 
(a) The length of the marriage. 
(b) The property brought to the marriage by each 
party. 
(c) Whether one of the parties has substantial 
assets not subject to division by the court. 
(d) The 
contribution of each party to the 
marriage, giving appropriate economic value to each 
party's contribution in homemaking and child care 
services. 
(e) The age and physical and emotional health of 
the parties. 
No. 
2009AP639   
 
13 
 
¶25 Property valued for the purpose of dividing the 
marital estate should be valued at its fair market value.  
                                                                                                                                                             
(f) The 
contribution 
by 
one 
party 
to 
the 
education, training or increased earning power of the 
other. 
(g) The 
earning 
capacity 
of 
each 
party, 
including educational background, training, employment 
skills, work experience, length of absence from the 
job market, custodial responsibilities for children 
and 
the 
time 
and 
expense 
necessary 
to 
acquire 
sufficient education or training to enable the party 
to become self-supporting at a standard of living 
reasonably comparable to that enjoyed during the 
marriage. 
(h) The desirability of awarding the family home 
or the right to live therein for a reasonable period 
to the party having physical placement for the greater 
period of time. 
(i) The amount and duration of an order under s. 
767.56 granting maintenance payments to either party, 
any order for periodic family support payments under 
s. 767.531 and whether the property division is in 
lieu of such payments. 
(j) Other economic circumstances of each party, 
including pension benefits, vested or unvested, and 
future interests. 
(k) The tax consequences to each party. 
(L) Any written agreement made by the parties 
before 
or 
during 
the 
marriage 
concerning 
any 
arrangement for property distribution; such agreements 
shall be binding upon the court except that no such 
agreement shall be binding where the terms of the 
agreement are inequitable as to either party.  The 
court shall presume any such agreement to be equitable 
as to both parties. 
(m) Such other factors as the court may in each 
individual case determine to be relevant. 
No. 
2009AP639   
 
14 
 
Liddle, 140 Wis. 2d at 138.  "Fair market value is the price 
that property will bring when offered for sale by one who 
desires but is not obligated to sell and bought by one who is 
willing but not obligated to buy."  Id.   
¶26 In this case, the issue is whether the entire value of 
the salable professional goodwill in Orthodontic Specialists is 
included in the marital estate subject to division under Wis. 
Stat. § 767.61.  Subsection 767.61(2) does not explicitly 
exclude professional goodwill from the divisible marital estate.  
Consequently, we turn to the applicable case law and policy 
considerations to decide whether the entire value of the salable 
professional goodwill is subject to property division. 
¶27 Defining professional goodwill is a necessary starting 
point.  In 1967, we recognized a business's goodwill as a 
divisible marital asset.  Spheeris v. Spheeris, 37 Wis. 2d 497, 
155 N.W.2d 130 (1967).  In doing so, we underscored the 
difficulty in defining the concept, but set forth the following 
definition: 
In its broadest sense the intangible asset called 
good will may be said to be reputation; however, a 
better description would probably be that element of 
value which inheres in the fixed and favorable 
consideration of customers arising from an established 
and well-conducted business. 
Id. at 504 (footnote and internal quotation marks omitted).  
Similarly, the court of appeals has advanced the following 
definition: 
The advantage or benefit which is acquired by an 
establishment beyond the mere value of the capital 
No. 
2009AP639   
 
15 
 
stock, 
funds, 
or 
property 
employed 
therein, 
in 
consequence of 
the general public patronage and 
encouragement which it receives from constant or 
habitual customers on account of its local position, 
or common celebrity, or reputation for skill or 
affluence, or punctuality, or from other accidental 
circumstances or necessities, or even from ancient 
partiality or prejudices. 
Holbrook v. Holbrook, 103 Wis. 2d 327, 345, 309 N.W.2d 343 (Ct. 
App. 1981) (citing 38 Am. Jur. 2d., Goodwill § 1 (1968)).  
Stated another way, goodwill is "[a] business's reputation, 
patronage, and other intangible assets that are considered when 
appraising the business, [especially] for purchase; the ability 
to earn income in excess of the income that would be expected 
from the business viewed as a mere collection of assets."  
Black's Law Dictionary 763 (9th ed. 2009).  Simply stated, 
goodwill is "an asset of recognized value beyond the tangible 
assets of [a business]."  Taylor v. Taylor, 386 N.W.2d 851, 857 
(Neb. 1986). 
¶28 Originally, it was posited that goodwill did not 
inhere 
in 
professional 
businesses 
because 
professional 
businesses 
depend 
on 
the 
skill 
and 
reputation 
of 
the 
professional.  Holbrook, 103 Wis. 2d at 346.  However, courts 
and scholars now recognize goodwill in professional businesses.  
See, e.g., id. at 347-49; Peerenboom v. Peerenboom, 147 Wis. 2d 
547, 550-52, 433 N.W.2d 282 (Ct. App. 1988); Golden v. Golden, 
75 Cal. Rptr. 735, 737-38 (Ct. App. 1969); Christopher A. Tiso, 
Present Positions on Professional Goodwill:  More Focus or 
Simply More Hocus Pocus?, 20 J. Am. Acad. Matrimonial L. 51, 52 
(2006) [hereinafter "Tiso, Present Positions"].  When goodwill 
No. 
2009AP639   
 
16 
 
inheres in a professional business, it is most properly 
classified as "professional goodwill."  Tiso, Present Positions, 
at 52.  
¶29 As aforementioned, we recognized goodwill as part of 
the divisible marital estate as early as 1967.  In Spheeris, in 
order to calculate Mr. Spheeris's net worth for the divorce 
judgment, the circuit court included the value of the goodwill 
attributable to the retail discount store owned by Mr. Spheeris.  
Spheeris, 37 Wis. 2d at 503.  Mr. Spheeris did not challenge the 
inclusion of goodwill as a divisible marital asset; rather, he 
challenged the valuation of the goodwill by use of predictive 
formulas, absent a sale of the business.  Id. at 506.  In other 
words, Mr. Spheeris argued that "the only way to establish 
[goodwill] is through a purchase price agreed upon in a 
voluntary arm's-length transaction."  Id. 
¶30 We disagreed, holding that there need not be an actual 
sale in order to determine the existence and value of a 
business's goodwill.  We stated: 
It is true that the best indicator of [goodwill] would 
be such a purchase price.  However, there is no 
authority in Wisconsin that would either proscribe or 
preclude the use of mathematical computations to 
determine the value of [goodwill].  Actually, the 
employment 
of 
such 
mathematical 
formulas 
in 
determining [goodwill] appears to be widespread. 
Id.  We opined further that when determining the value of 
goodwill, there are no prescribed formulas the circuit court 
must apply.  Id.  
No. 
2009AP639   
 
17 
 
¶31 While 
Spheeris 
involved 
a 
commercial 
business, 
subsequent 
Wisconsin 
cases 
have 
recognized 
goodwill 
in 
professional practices.  In Holbrook, Mr. Holbrook was a partner 
in a large law firm.  Holbrook, 103 Wis. 2d at 330.  The court 
of appeals considered whether the circuit court had erroneously 
determined that the goodwill in Mr. Holbrook's partnership 
interest in the law firm was a divisible marital asset.  Id. at 
344.  In concluding that the circuit court did err, the court 
began its discussion with a blanket statement that, standing 
alone, would imply the court was prohibiting any inclusion of 
professional goodwill in the divisible marital estate.  The 
court stated, "[w]e are not persuaded that the concept of 
professional goodwill as a divisible marital asset should be 
adopted in Wisconsin."  Id. at 350. 
¶32 However, the court's subsequent discussion focused on 
its assumption that professional goodwill cannot be sold, and 
"accrues to the benefit of the owners only through increased 
salary."  Id.  For instance, the court compared the professional 
goodwill 
in 
Mr. 
Holbrook's 
partnership 
interest 
to 
a 
professional degree.  It opined that "[l]ike an educational 
degree, a partner's theoretical share of a law firm's goodwill 
cannot be exchanged on an open market:  it cannot be assigned, 
sold, transferred, conveyed or pledged. . . .  In both cases, 
the 'asset' involved is not salable and has computable value to 
the individual only to the extent that it promises increased 
future earnings."  Id. at 351 (emphasis added) (footnote 
omitted).  Moreover, the court underscored that, apart from 
No. 
2009AP639   
 
18 
 
receiving the value of his capital account, Mr. Holbrook was 
"[e]thically and contractually . . . prevented from otherwise 
disposing of his interest" in the firm.  Id. at 352. 
¶33 Accordingly, 
Wisconsin 
courts 
considering 
the 
valuation of professional goodwill subsequent to Holbrook have 
limited Holbrook's assertion that professional goodwill is not 
part of the divisible marital estate to situations where the 
professional 
goodwill 
is 
nonsalable. 
 
For 
example, 
in 
Peerenboom, the court of appeals concluded that the goodwill in 
a divorcing spouse's dental practice could be a divisible 
marital asset.  Peerenboom, 147 Wis. 2d at 552.  The court 
distinguished Holbrook: 
Holbrook . . . involved the division of an individual 
lawyer's interest in a large law firm.  The court 
explained 
that 
due 
to 
ethical 
and 
contractual 
considerations, 
his 
interest 
in 
the 
law 
firm's 
goodwill could not be exchanged or sold on the open 
market.  The court concluded therefore that it would 
be inequitable to compel "a professional practitioner 
to pay a spouse a share of intangible assets at a 
judicially determined value that could not be realized 
by a sale or another method of liquidating value."  
. . .   
In contrast, in this case the record shows no 
ethical or contractual barrier to [Dr. Peerenboom's] 
disposing of his interest in his dental practice.  
Accordingly, to the extent that the evidence shows 
that the goodwill exists, is marketable, and that its 
value is something over and above the value of the 
practice's assets and the professional's skills and 
services, it may be included as an asset in the 
marital estate and be subject to division. 
Id. at 551-52 (quoting Holbrook, 103 Wis. 2d at 351). 
No. 
2009AP639   
 
19 
 
¶34 Similarly, in Sommerfield v. Sommerfield, 154 Wis. 2d 
840, 454 N.W.2d 55 (Ct. App. 1990), the court of appeals held 
that the circuit court erred when, for the purpose of setting 
the 
value 
of 
Mr. 
Sommerfield's 
accounting 
practice, 
it 
disregarded the expert witness's valuation of the practice's 
goodwill.  Id. at 852-54.  Starting with the premise that 
goodwill can be a marketable asset, the court underscored the 
expert's opinion that a noncompete agreement covering two years 
would be the normal condition under which a practice like Mr. 
Sommerfield's would be sold.  Id. at 853.  Concluding that there 
was no evidence that such a noncompete agreement would be 
unenforceable, the court held that the circuit court erroneously 
found that there was not separate, marketable goodwill in Mr. 
Sommerfield's practice that could be included in the divisible 
marital estate.  Id. at 854.  
¶35 In accordance with previous Wisconsin case law, we 
conclude today that when valuing a business interest that is 
part of the marital estate for purposes of divorce, a circuit 
court shall include the value of the salable professional 
goodwill attendant to the business interest.14  In addition to 
the above discussed case law, this conclusion is supported by 
                                                 
14 In the case before us, there was no contention that the 
business interest in Orthodontic Specialists was not part of the 
marital estate.  Rather, the issue presented turned on how that 
interest was to be valued.  However, there may be occasions when 
the issue is whether the business interest should be included in 
the marital estate in the first instance.  See Steinmann v. 
Steinmann, 2008 WI 43, ¶¶28-29, 309 Wis. 2d 29, 749 N.W.2d 145.   
No. 
2009AP639   
 
20 
 
Wis. Stat. § 767.61 and the policy considerations behind 
§ 767.61.   
¶36 First, while Wis. Stat. § 767.61(2) excludes specific 
property from the marital estate, professional goodwill is not 
listed therein.  Moreover, under § 767.61(3), we presume that 
the 
marital 
estate 
should 
be 
divided 
equally. 
 
As 
aforementioned, the presumption of equal division recognizes the 
contributions of each spouse to the marriage, including a 
homemaker spouse's lost earning capacity from being out of the 
job market.  Where the salable professional goodwill is 
developed during the marriage, it defies the presumption of 
equality to exclude it from the divisible marital estate.  As 
one court has explained: 
[T]he wife, by virtue of her position of wife, made to 
that [goodwill] value the same contribution as does a 
wife 
to 
any 
of 
the 
husband's 
earnings 
and 
accumulations during the marriage.  She is as much 
entitled to be recompensed for that contribution as if 
it were represented by the increased value of stock in 
a family business.   
Golden, 75 Cal. Rptr. at 738.15   
¶37 In sum, pursuant to Wis. Stat. § 767.61, Wisconsin 
case law and the policy supporting the presumption of equality 
in the division of the marital estate, we hold that a circuit 
court shall include salable professional goodwill in the 
                                                 
15 In Golden v. Golden, 75 Cal. Rptr. 735 (Ct. App. 1969), 
the non-professional spouse was the wife.  We recognize that the 
roles could easily be reversed, with the non-professional spouse 
being the husband.   
No. 
2009AP639   
 
21 
 
divisible marital estate when the business interest to which the 
goodwill is attendant is an asset subject to § 767.61. 
¶38 Tim urges us to require circuit courts to divide 
professional goodwill into two subgroups, "personal" goodwill 
and "enterprise" goodwill, and to create a presumption that 
personal goodwill is excluded from the marital estate.  This is 
an approach taken by some courts and scholars.  See Tiso, 
Present Positions, at 53.   
¶39 When professional goodwill is so divided, enterprise 
goodwill is characterized as "[g]oodwill in a professional 
practice . . . attributable to the business enterprise itself by 
virtue of its existing arrangements with suppliers, customers or 
others, and its anticipated future customer base due to factors 
attributable to the business."  Id. (quoting Yoon v. Yoon, 711 
N.E.2d 1265, 1268 (Ind. 1999)); see also May v. May, 589 S.E.2d 
536, 541-42 (W. Va. 2003).  Personal goodwill, on the other 
hand, is characterized as the goodwill that is "attributable to 
the individual owner's personal skill, training or reputation," 
i.e., it is "the goodwill that depends on the continued presence 
of a particular individual."  Id. (quoting Yoon, 711 N.E.2d at 
1268-69); see also May, 589 S.E.2d at 542.   
¶40 Some courts that divide professional goodwill into 
enterprise and personal goodwill have concluded that enterprise 
goodwill is included in the divisible marital estate, and 
personal goodwill is not.  This conclusion is based in large 
part on the belief that enterprise goodwill is salable, while 
personal goodwill is not.  For instance, in Yoon, the Supreme 
No. 
2009AP639   
 
22 
 
Court of Indiana included enterprise goodwill in the divisible 
estate, 
explaining 
that 
while 
"[i]t 
is 
not 
necessarily 
marketable in the sense that there is a ready and easily priced 
market for it, [] it is in general transferable to others and 
has a value to others."  Yoon, 711 N.E.2d at 1269.  With respect 
to personal goodwill, however, the Yoon court explained that 
because personal goodwill depends on the continued presence of 
the particular professional, it "represents nothing more than 
the 
future 
earning 
capacity 
of 
the 
individual." 
 
Id.  
Consequently, based on its belief that personal goodwill is not 
salable, the Yoon court excluded personal goodwill from the 
marital estate.  Id.; see also Antolik v. Harvey, 761 P.2d 305, 
317-18 (Haw. Ct. App. 1988).  
¶41 After 
reviewing 
cases 
that 
distinguish 
between 
personal and enterprise goodwill, we choose not to require 
circuit courts to draw a distinction between personal and 
enterprise goodwill when dividing a marital estate that includes 
professional goodwill.  This is so because the premise on which 
the distinction is grounded——that enterprise goodwill is salable 
and personal goodwill is not——is mistaken.  As evidenced by the 
facts of the case at hand, Tim testified that when he bought 
Orthodontic Specialists for $930,000, nearly 90 percent of the 
sale price was for the professional goodwill.  Tim described 
this goodwill as including elements of "personal" goodwill:  
"Dr. Grady's name, the noncompete clause, and the employment 
agreement that Dr. Grady would stay on to introduce me to his 
No. 
2009AP639   
 
23 
 
existing patients."  Therefore, as this case demonstrates, in 
some situations, personal goodwill is salable. 
C.  Maintenance and Double Counting 
¶42 Having concluded that a circuit court shall consider 
salable professional goodwill, including what some courts term 
"personal" goodwill, as a divisible marital asset, we now set 
forth the law applicable to the second issue presented.  The 
second issue presented is whether the circuit court double 
counted the value of Tim's professional goodwill by basing 
Tracy's maintenance award on Tim's expected future earnings when 
the future earnings will arise from Orthodontic Specialists.  
Under Tim's line of reasoning, the circuit court counted the 
goodwill once when it treated the goodwill as a divisible 
marital asset.  Tim contends that the court then counted 
professional goodwill a second time when it awarded maintenance 
based on his past earnings from Orthodontic Specialists, given 
that professional goodwill increased those past earnings. 
¶43 We begin with an overview of maintenance in Wisconsin.  
Maintenance awards16 upon a divorce are governed by Wis. Stat. 
§ 767.56.  Pursuant to § 767.56, a circuit court "may grant an 
order requiring maintenance payments to either party for a 
limited or indefinite length of time" after considering a list 
of enumerated factors.17  As aforementioned, it is within the 
                                                 
16 Generally, maintenance is "[f]inancial support given by 
one person to another, [usually] paid as a result of a legal 
separation or divorce."  Black's Law Dictionary 1039 (9th ed. 
2009). 
17 Those factors are: 
No. 
2009AP639   
 
24 
 
circuit court's discretion to determine the amount and duration 
                                                                                                                                                             
(1) The length of the marriage. 
(2) The age and physical and emotional health of 
the parties. 
(3) The division of property made under s. 
767.61. 
(4) The educational level of each party at the 
time of marriage and at the time the action is 
commenced. 
(5) The earning capacity of the party seeking 
maintenance, 
including 
educational 
background, 
training, employment skills, work experience, length 
of 
absence 
from 
the 
job 
market, 
custodial 
responsibilities for children and the time and expense 
necessary to acquire sufficient education or training 
to enable the party to find appropriate employment. 
(6) The 
feasibility 
that 
the 
party 
seeking 
maintenance can become self-supporting at a standard 
of living reasonably comparable to that enjoyed during 
the marriage, and, if so, the length of time necessary 
to achieve this goal. 
(7) The tax consequences to each party. 
(8) Any mutual agreement made by the parties 
before or during the marriage, according to the terms 
of which one party has made financial or service 
contributions to the other with the expectation of 
reciprocation or other compensation in the future, if 
the repayment has not been made, or any mutual 
agreement made by the parties before or during the 
marriage concerning any arrangement for the financial 
support of the parties. 
(9) The 
contribution 
by 
one 
party 
to 
the 
education, training or increased earning power of the 
other. 
(10) Such other factors as the court may in each 
individual case determine to be relevant.  
No. 
2009AP639   
 
25 
 
of maintenance.  Rohde-Giovanni, 269 Wis. 2d 598, ¶17.  However, 
the factors enumerated in § 767.56 should be the "touchstone of 
analysis" when a court sets maintenance.  LaRocque v. LaRocque, 
139 Wis. 2d 23, 32, 406 N.W.2d 736 (1987).  
¶44 There are two objectives that an award of maintenance 
seeks to meet.  The first objective is support of the payee 
spouse.  Id. at 33.  This objective may not be met by merely 
maintaining the payee spouse at a subsistence level.  Id. at 35.  
Rather, maintenance should support the payee spouse at the pre-
divorce standard.  Id.  This standard should be measured by "the 
lifestyle that the parties enjoyed in the years immediately 
before the divorce and could anticipate enjoying if they were to 
stay married."  Id. at 36.  The second objective is fairness, 
which aims to "compensate the recipient spouse for contributions 
made to the marriage, give effect to the parties' financial 
arrangements, or prevent unjust enrichment of either party."  
Id. at 33.  
¶45 When determining the appropriate maintenance award, we 
have instructed courts to start with "the proposition that the 
dependent partner may be entitled to 50 percent of the total 
earnings of both parties" and then make any needed adjustments 
after considering the Wis. Stat. § 767.56 factors.  Bahr v. 
Bahr, 107 Wis. 2d 72, 85, 318 N.W.2d 391 (1982); see also 
Heppner v. Heppner, 2009 WI App 90, ¶12, 319 Wis. 2d 237, 768 
N.W.2d 261.  Notwithstanding the proscribed starting point, 
"[t]he payment of maintenance is not to be viewed as a permanent 
annuity."  Vander Perren v. Vander Perren, 105 Wis. 2d 219, 230, 
No. 
2009AP639   
 
26 
 
313 N.W.2d 813 (1982).  Rather, maintenance is "designed to 
maintain a party at an appropriate standard of living, under the 
facts and circumstances of the individual case, until the party 
exercising reasonable diligence has reached a level of income 
where maintenance is no longer necessary."  Id. 
¶46 As is the case here, concerns about double counting 
sometimes arise when awarding maintenance.  We first pronounced 
the rule against double counting in Kronforst v. Kronforst, 21 
Wis. 2d 54, 123 N.W.2d 528 (1963).  At issue in Kronforst was 
the counting of Mr. Kronforst's interest in his employment 
profit-sharing trust.  The trust was set up so that, upon 
termination of his employment, Mr. Kronforst could either 
withdraw his interest from the trust or have his interest 
disbursed to him in monthly installments over ten years.  Id. at 
63.  When dividing the marital estate upon the couple's divorce, 
the 
circuit 
court 
included, 
as 
a 
divisible 
asset, 
Mr. 
Kronforst's interest in the trust and awarded the interest to 
him.18  Id.   
¶47 On review, we concluded that the circuit court 
properly included Mr. Kronforst's interest in the trust in the 
divisible estate.  We held, however, that the circuit court 
erred when it also considered the payments from the trust as Mr. 
Kronforst's income when calculating maintenance.  Id. at 63-64.  
We underscored that at the time of trial, Mr. Kronforst was on 
                                                 
18 Ms. Kronforst was awarded 49 percent of the net estate, 
and Mr. Kronforst was awarded 51 percent.  Kronforst v. 
Kronforst, 21 Wis. 2d 54, 60, 123 N.W.2d 528 (1963). 
No. 
2009AP639   
 
27 
 
extended medical leave, and therefore, "all probabilities" were 
that he would not return to work, meaning that his interest in 
the trust would not grow.  Id. at 63.  As such, we opined: 
We view the matter no differently than if the $9,749 
had constituted cash in a bank deposit standing in 
defendant's name.  Such an asset cannot be included as 
a principal asset in making division of the estate and 
then also as an income item to be considered in 
awarding alimony. 
Id. at 64.  
¶48 Our case law since Kronforst has refined the rule 
against double counting.  In Hommel v. Hommel, 162 Wis. 2d 782, 
471 N.W.2d 1 (1991), we held that, generally, it did not violate 
the rule against double counting to include "investment income 
from assets awarded to a spouse as part of an equal division of 
property pursuant to a divorce settlement [when] calculating 
that spouse's income for purposes of revising a maintenance 
award to the payee spouse."  Id. at 793.  In so holding, we 
relied in part on the court of appeal's rationale and holding in 
Pelot v. Pelot, 116 Wis. 2d 339, 342 N.W.2d 64 (Ct. App. 1983). 
¶49 In Pelot, when dividing the marital estate, the 
circuit court assigned Mr. Pelot his union pension fund.  Id. at 
341.  The fund was calculated to have a present value of $9,680 
at the time of the property division.  Id.  Later, when Mr. 
Pelot moved to modify the maintenance Mr. Pelot was paying to 
Ms. Pelot, the circuit court included in Mr. Pelot's income the 
monthly benefits from the pension fund.  Id. at 342.  On review, 
the court of appeals acknowledged the Kronforst rule against 
double counting, asserting that "[i]f the present value is 
No. 
2009AP639   
 
28 
 
included in the estate, then the pension payments themselves are 
not [to be] counted as income for purposes of fixing maintenance 
when the divorce is granted."  Id. at 343.  
¶50 The court went on, however, to question whether the 
Kronforst rule is absolute.  Id. at 344.  Specifically, the 
court underscored that there is a close relationship between 
maintenance and property division, as evidenced by the fact 
that, pursuant to Wis. Stat. § 767.26(3) (1981-82), one of the 
factors 
that 
a 
circuit 
court 
must 
consider 
in 
setting 
maintenance is the property division.19  Id.  Because of this 
close relationship between maintenance and property division, 
the court concluded that "if the value of a pension fund is 
included in the property division, the court may consider it 
when making a maintenance award, although it must be considered 
differently from property which can be presently enjoyed."  Id. 
at 345.  
¶51 Based on this conclusion, the court held that "the 
trial court should exclude from [Mr. Pelot's] income his monthly 
retirement benefits until those benefits total $9,680, the value 
of the fund when it was assigned to him in the divorce."  Id. at 
342-43 (emphasis added).  Once Mr. Pelot received the value of 
                                                 
19 The court of appeals pointed out that Kronforst was 
decided before the 1977 Divorce Reform Act.  Pelot v. Pelot, 116 
Wis. 2d 339, 344, 342 N.W.2d 64 (Ct. App. 1983).  Consequently, 
the statute in effect at that time did not include the 
enumerated factors.  See generally Wis. Stat. ch. 247 (1963). 
However, as with Wis. Stat. § 767.26(3) (1981-82), one factor 
listed in Wis. Stat. § 767.56 is the division of marital 
property.   
No. 
2009AP639   
 
29 
 
the pension assigned to him when the marital estate was divided 
(i.e., 
the 
$9,680), 
then 
his 
pension 
benefits 
could 
be 
considered income.  Id. at 346.  We have since applied the same 
rule as the court of appeals applied in Pelot for when pension 
benefit 
payouts 
can 
be 
considered 
income 
in 
awarding 
maintenance.  Olski v. Olski, 197 Wis. 2d 237, 251, 540 N.W.2d 
412 (1995) (assuming, based on the facts in the record, that the 
employee husband had received the full value of the pension 
benefits awarded him in the property division and holding, 
therefore, that "all future receipts of pension benefits are 
available 
in 
their 
entirety 
for 
possible 
maintenance 
obligations").  
¶52 Our reliance on Pelot in Hommel illustrates our 
rationale in Hommel for concluding that investment income that 
arises from a divided asset can be considered when determining 
maintenance.20  As in Pelot, in the typical property division 
case involving a pension, the trial court may determine the 
                                                 
20 While we were not as explicit in explaining our rationale 
as we could have been in Hommel, we now attempt to better 
illuminate the rationale underlying our holding.  
No. 
2009AP639   
 
30 
 
present value of the pension.21  When the present value of a 
pension plan is calculated, that present value is based, in 
part, on projected future benefit payments.  See generally 
Pelot, 116 Wis. 2d at 341-43; see also Bloomer v. Bloomer, 84 
Wis. 2d 124, 130-32, 267 N.W.2d 235 (1978) (explaining how 
numerous courts have calculated the present value of pension 
funds for property division purposes).  Therefore, assuming the 
employee spouse is awarded the present value of the asset, he or 
she does not receive the value of the asset at the time of the 
property division.  Rather, the spouse receives that value via 
future payments.  Accordingly, as the court of appeals in Pelot 
underscored, it would be double counting to count the present 
value of the pension as a divisible asset and also count the 
future payments as income, since the income, up to the valuation 
placed on the pension at the time of the division, are one and 
the same.   
                                                 
21 "We have long recognized that a pension interest is very 
difficult to value."  Olski v. Olski, 197 Wis. 2d 237, 248, 540 
N.W.2d 412 (1995) (citations and internal quotation marks 
omitted).  As we have explained, "[t]he problem of valuing 
prospective 
benefits 
under 
a 
pension 
plan 
is 
frequently 
exacerbated by the fact that unmatured rights may be terminated 
by death, discharge, or other contingencies. . . .  Valuation is 
further complicated by the dual nature of most pension plans.  
If the employee continues to work until retirement, the payments 
to 
the 
employee, 
to 
the 
extent 
derived 
from 
employer's 
contributions, are in the nature of deferred compensation. If, 
however, the employee terminates work before retirement age, the 
usual plan provides at least for the return of employee 
contributions."  Bloomer v. Bloomer, 84 Wis. 2d 124, 130, 267 
N.W.2d 235 (1978) (internal citations omitted).  This complexity 
underscores the necessity to give trial courts "broad discretion 
in valuing pension rights."  Id. at 134. 
No. 
2009AP639   
 
31 
 
¶53 Contrarily, when an income earning asset is assigned 
to one spouse, as in Hommel, that spouse, generally, receives 
the full fair market value of that asset at the time of the 
property division.  Stated otherwise, if the spouse was awarded 
income property, that spouse could turn around and sell the 
income property the next day and, thereby, attain the value of 
the property.  The spouse could also elect to keep the property 
and earn income from it.  As the spouse earns income, he or she 
does not lose the value of the property because he or she always 
has the option to sell the property for fair market value.  
Therefore, unlike pension benefit payments (up to the present 
value placed on the pension at the time of the division), the 
value of investment property is separate from the income it 
generates.  Consequently, as Hommel held, counting income from 
income earning assets will typically not implicate double 
counting.  Hommel, 162 Wis. 2d at 792; see also, Heppner, 319 
Wis. 2d 237, ¶18 (concluding there is no improper double 
counting when income from stock options awarded during property 
division is included in income when calculating maintenance). 
¶54 Several years after Hommel, in 1997, we again analyzed 
the contours of the rule against double counting.  Cook, 208 
Wis. 2d at 175-85.  The issue in Cook was whether a military 
pension that was divided between the spouses in the property 
division could also be considered income when calculating 
maintenance.  Id. at 175.  While the facts of Cook did not 
require us to "ascertain the precise scope of Kronforst's 
'double-counting' rule," from our review of the double-counting 
No. 
2009AP639   
 
32 
 
case law, we concluded any prohibition of double counting must 
be flexible.  Id. at 179.  Namely, we opined that given the 
"infinite range of factual situations facing circuit courts in 
dividing 
property 
and 
determining 
maintenance 
and 
child 
support," it would be unwise to proscribe inflexible double-
counting rules.  Id. at 180.  Instead, we stressed that "the 
'double-counting' rule serves to warn parties, counsel and the 
courts to avoid unfairness by carefully considering the division 
of income-producing and non-income-producing assets and the 
probable effects of that division on the need for maintenance 
and the availability of income to both parents for child 
support."  Id.  In short, when analyzing whether there has been 
double counting, the focus should be on fairness, not rigid 
double-counting rules.  
D.  Application 
a.  Goodwill 
¶55 We now apply the legal principles set forth above to 
the facts and circumstances of this case.  Starting with the 
value of professional goodwill in Orthodontic Specialists, Tim 
contends that the entire value of the salable professional 
goodwill in Orthodontic Specialists should not be included in 
the divisible marital estate.  Specifically, Tim would like what 
he classifies as personal goodwill to be excluded.22  Notably, 
Tim does not argue that, if, as a matter of law, the entire 
                                                 
22 Tim does not aver that enterprise goodwill is excludable 
from the marital estate.  See supra ¶17 above. 
No. 
2009AP639   
 
33 
 
value of Orthodontic Specialists' salable goodwill is includable 
in the marital estate, the circuit court's finding that 
Orthodontic 
Specialists' 
value 
is 
$1,058,000 
was 
clearly 
erroneous.  Nor does he challenge that the property should be 
divided equally.   
¶56 Pursuant to our conclusion above, see supra II.B., the 
entire amount of salable professional goodwill was appropriately 
included in the marital estate.  Here, Tim has not shown that 
the $1,058,000 value placed on Orthodontic Specialists includes 
nonsalable goodwill.  Rather, the facts indicate the contrary.  
In particular, Tim bought the practice, over a decade ago, for 
$930,000.  Approximately 90 percent of this purchase price was 
paid for goodwill.  Moreover, Tim testified that this goodwill 
included "Dr. Grady's name, the noncompete clause, and the 
employment agreement that Dr. Grady would stay on to introduce 
me to his existing patients, [and] to counsel me through the 
process of learning how to do business," much of which is 
included in what Tim classifies as personal goodwill. 
¶57 As the sale from Dr. Grady to Tim shows, personal 
goodwill in an orthodontic practice is salable.  It is 
appropriate to include the salable goodwill from Orthodontic 
Specialists in the divisible marital estate.  See Sommerfield, 
154 Wis. 2d at 854.   
¶58 Moreover, the record is replete with evidence that 
Tracy contributed to the development and success of Orthodontic 
Specialists.  There is no question that she helped to create the 
business's 
goodwill. 
 
Consequently, 
under 
the 
statutory 
No. 
2009AP639   
 
34 
 
presumption of an equal division of the marital estate and the 
contributions of both parties to the creation of the marital 
estate herein, the circuit court did not erroneously exercise 
its discretion when it included the goodwill associated with 
Orthodontic Specialists in the marital estate and divided it on 
a 50:50 basis.  Stated otherwise, the circuit court did not 
erroneously exercise its discretion when it included the entire 
$1,058,000 value of Orthodontic Specialists' goodwill in the 
marital estate.   
b.  Double counting 
¶59 Tim argues that the circuit court double counted the 
value of his professional goodwill when it included the goodwill 
in the divisible marital estate, and then based Tracy's 
maintenance award on Tim's expected future earnings.  According 
to Tim, the expected future earnings also included the value of 
the goodwill because it was calculated using Tim's average 
income over the preceding five years which was increased by the 
goodwill.  We disagree. 
¶60 We start by underscoring our directive in Cook that 
the rule against double counting is advisory and not absolute.  
Cook, 208 Wis. 2d at 180.  As set forth above, the double 
counting rule does not prohibit the inclusion of investment 
income from assets awarded to a spouse as part of property 
division when calculating maintenance.  Hommel, 162 Wis. 2d at 
792.  This is so because the value of the investment asset is 
separate from the income it produces.  Contrarily, pension 
benefit payouts (until they reach the amount of the valuation 
No. 
2009AP639   
 
35 
 
given the pension as an asset at the time of the property 
division) do not create value separate from the pension as an 
asset at the time of the property division.  Olski, 197 Wis. 2d 
at 243-51; Pelot, 116 Wis. 2d at 343.  Applying these principles 
to the case at hand, we conclude that the salable professional 
goodwill in Orthodontic Specialists is similar to an asset that 
produces income. 
¶61 As with an income producing asset, the value of 
Orthodontic Specialists at the time of the property division had 
a set value, namely, $1,058,000.  If Tim so chose, at the time 
of the property division, he could have sold Orthodontic 
Specialists and realized this value.  Or, he could retain 
Orthodontic Specialists, earn income from it and sell it at a 
later time.  Consequently, Tim has the option of continuing to 
generate substantial income from Orthodontic Specialists without 
diminishing its value.  Specifically, the circuit court found 
that if Tim works 40 hours per week, Tim's income will be 
$465,000 annually.  As with income from an income earning asset, 
this 
income 
is 
separate 
from 
the 
value 
of 
Orthodontic 
Specialists as it existed at the time of the property division.  
Consequently, the circuit court did not double count Orthodontic 
Specialists' professional goodwill and, therefore, did not 
erroneously exercise its discretion when it awarded Tracy 
$16,000 per month, for 20 years, in maintenance. 
III.  CONCLUSION 
¶62 We conclude the entire value of salable professional 
goodwill was properly counted as divisible property in the 
No. 
2009AP639   
 
36 
 
marital estate.  Moreover, we conclude that the circuit court 
did not double count the professional goodwill from Orthodontic 
Specialists in the maintenance award.  Accordingly, we affirm 
the decision of the court of appeals. 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
 
No. 
2009AP639   
 
 
 
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