When we represent medical professionals or their spouses in divorce cases, one of the most important and complex issues we address is how to handle a medical practice. A medical practice may be a solo operation, part of a partnership, or tied to a larger healthcare group, but no matter its size, it often represents a significant financial and professional interest.
Dividing or assigning the value of that practice is rarely straightforward. Emotions often run high, and both parties want to protect their financial future. That’s why it’s important to understand how Illinois law treats business interests like medical practices during divorce.
In Illinois, medical practices, just like other businesses, can be considered marital property, separate property, or a mix of both, depending on when and how they were created and maintained.
The court looks at many factors, including how the practice was started, whether marital funds contributed to its growth, and how the value of the business has changed during the marriage. Under Illinois law, all marital property must be divided equitably, not necessarily equally, under 750 ILCS 5/503.
Illinois uses the concept of equitable distribution, which means marital property is divided in a way that is fair, not automatically 50/50. If a medical practice was started during the marriage, it is generally considered marital property. However, if it was started before the marriage but increased in value during the marriage due to joint efforts or reinvestment of marital funds, the increase in value may be marital.
On the other hand, if a spouse owned the practice before marriage and kept all finances and assets separate, the practice may be considered non-marital property. But the burden is on the owner to prove that the business remained completely separate from the marital estate.
One of the first steps we take when handling these cases is to determine the value of the medical practice. This is a complex process that often requires hiring a business valuation expert. The valuation typically includes:
Professional goodwill can be especially difficult to measure. Some goodwill is considered personal and tied directly to the physician’s reputation, which may not be transferable or divisible. In Illinois, professional goodwill is generally not treated as a marital asset unless it can be sold or transferred.
Once we determine whether the practice is marital and assign a value to it, the next step is deciding what to do with it. In most cases, the court does not force the sale of a medical practice. Instead, the owning spouse typically retains full ownership of the practice and offsets the value by awarding the other spouse a larger portion of other marital assets. This is often called a “buy-out.”
For example, if a medical practice is valued at $400,000, the physician spouse may keep the practice while the non-physician spouse receives other assets of equal value, such as a retirement account, investment property, or equity in the marital home.
We understand that medical professionals must also consider patient confidentiality, licensing, and partnership agreements. A divorce should not compromise HIPAA regulations or disrupt the operation of the practice. We take extra care to protect patient information, review partnership agreements, and assess whether third-party contracts restrict ownership changes or valuation.
If the medical practice is generating substantial income, that income may also impact spousal support (maintenance) decisions under 750 ILCS 5/504. Courts will consider each spouse’s financial needs and the paying spouse’s ability to pay. It’s not uncommon for the non-owning spouse to receive maintenance if they supported the practice’s development or left their career to support the family.
No. A medical practice is only considered marital property if it was started during the marriage or if it increased in value due to marital efforts or funds. If the practice was established before the marriage and remained separate, it may be considered non-marital.
We work with business valuation professionals who consider the practice’s assets, income, liabilities, and goodwill. This includes equipment, real estate, patient contracts, and even the reputation of the practice if it has transferable value.
In most cases, no. Courts generally avoid disrupting a professional’s ability to earn a living. Instead, the physician usually keeps the practice and compensates the other spouse with other marital assets.
If both spouses are joint owners or partners in the practice, one may buy out the other’s interest, or in rare cases, they may continue running the practice together post-divorce. The court will evaluate the best outcome based on financial and operational feasibility.
No. Future earnings are not divided directly, but income from the practice can be used to calculate spousal support or child support obligations. The court will focus on your actual income and capacity to pay.
Illinois courts usually consider professional goodwill as personal to the individual physician and not divisible unless it has market value independent of the individual’s continued involvement.
No. We work to ensure patient confidentiality is preserved. Divorce proceedings will not require disclosure of patient records and must comply with HIPAA regulations at all times.
Yes. If a valid prenuptial agreement defines the practice as non-marital property, the court will generally enforce that provision. We review the terms to ensure they are legally enforceable.
No. Courts do not order the shutdown of a medical practice unless there is a very unusual circumstance. Instead, financial adjustments are made to preserve the practice and ensure a fair division of assets.
If you are part of a partnership or group, we will review your partnership agreement to determine any restrictions or obligations. Your partners typically have no liability in your divorce, but your interest in the practice may still be valued and divided.
At Keller Legal Services, we understand how important your professional life is, especially if you’ve built a medical practice through years of hard work. We also understand what’s at stake for your financial future and your family. Whether you are a physician or the spouse of a physician, we are here to help you protect what matters. Contact our Naperville divorce lawyer at Keller Legal Services by calling 630-505-1515 to receive your free consultation. We represent clients in Naperville and throughout the Chicago area with care, skill, and clear legal guidance.
