Source: http://riceamundsencapertonlaw.com/oh-noi-just-got-served-with-a-divorce-summons-how-to-value-your-practice/
Timestamp: 2019-04-25 06:32:14+00:00

Document:
Oh No…I Just Got Served with a Divorce Summons. How to Value Your Practice.
When medical professionals get served with a divorce summons, their first call should be to a divorce lawyer and the next, to their accountant. Why?
ike other professionals who work for a company, doctors typically have their own practice, building, equipment and staff, where they earn additional revenue and profits, and may even have an interest in a professional limited liability company or clinic. To the Tennessee courts, all these items are assets that need to be valued.
Marital property is all property, real and intangible, that is acquired during the marriage through the date of the divorce. 5 It matters not if the title to the asset is in one spouse’s name alone or in joint names.
What is needed to value a medical practice? A specialized business valuation analyst or appraiser will need to review financial records 6 to establish income, compare the income over five years, and determine the value of the asset.
It is important to work with your attorney and accountant early in the process, because the sooner these documents are provided, the quicker the accountant can determine the value, and the sooner the divorce can be resolved, so you can go back to doing what you do best…treating patients!
TCA 36-4-121. Langschmidt v.Langschmidt, 81 S.W. 3d 741 (Tenn. 2002).
Cutsinger v. Cutsinger, 917 S.W. 2d 238 (Tenn. App. W.S. 1995), appeal denied.
Financial records to be produced should include tax returns, K-1s, Schedule Cs, and supporting documents, corporate minutes, organizational documents, stock register, bank statements (business and personal), credit card statements (business and personal), payroll records, financial statements, profit and loss statements, income statements, buy-sell agreements, life insurance policies, profit sharing and deferred compensation plans for the last five years; and current account receivables, account payables, schedule of equipment register, work in progress, cash, and appraisals on any real estate owned by the practice.
Wallace v. Wallace, 733 S.W. 2d 102 (Tenn. App. 1987).
Dailey v. Bateman, 937 S.W. 2d 927 (Tenn. Ct. App. 1996).
Powell v. Powell, 124 S.W. 3d 100 (Tenn. App. April 7, 2003), perm. denied.
Smith v. Smith, 709 S.W. 2d 588 (Tenn. 1985).
Hazard v. Hazard, 833 S.W. 2d 911 (Tenn. App. WS 1991) appeal denied.
“A Buy-sell agreement usually provides for the purchase of a business entity or for the remaining principal’s purchase of the withdrawing party’s share at a predetermined price.” Orenstein and Skoloff, When a Professional Divorces: Strategies for Valuing Practices, Licenses, and Degrees, (ABA, 1998), page 27.
Physician Compensation and Production Survey, published by Medical Group Management Association Center for Research and Ambulatory Health Care Administration.
Those intangible assets are items such as, how many patients have been built up, how many hours it took to take all of the history and physical information, how many hours of training does the staff have, how profitable is the practice without the doctor being there, what can be charged for services that the doctor did not perform.
Witt v. Witt, 1992 WL 52746 (Tenn. Ct. App. 1992).
York v. York, 1992 WL 181710 (Tenn. Ct. App. 1992).

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