Personal Goodwill and the Division of Business Assets in Divorce

Sometimes the most valuable things your spouse brings to a marriage are not things.  Long-divorced people may confess to folks contemplating divorce that, although their own divorces wrecked them financially, what they really miss is their ex’s cooking, home repair skills, or tact in dealing with difficult social situations.  If you are happily married, you might appreciate how good your spouse is at his or her profession.  If you are divorced, you probably did not appreciate your spouse’s professional talents until your spouse was gone.  Is it your ex’s professional expertise that you miss, or the money that your ex earns with that expertise?  Can you put a dollar value on someone’s professional expertise?  This is the question at issue in disputes over personal goodwill, in a business context, in divorce cases.  If you are going through a divorce, and you and your spouse disagree about the value of business assets, especially intangible ones, contact a Boca Raton divorce lawyer.

What Is Personal Goodwill, and Is It Possible to Share It With Your Ex-Spouse?

The family law courts have established that the reputation of a business is one of its assets.  Therefore, if a business is marital property, it is possible to award a portion of the value of the company’s assets to the spouse who does not keep the business in the divorce.  These assets might include the building that houses the business, as well as its equipment.  It can also include intangible assets, such as the company’s reputation, which is known in legal terminology as goodwill.  Enterprise goodwill is the reputation of the company as a whole, and personal goodwill is the professional reputation of a person who works for the company.

When an anesthesiologist got divorced in Florida, the value of his personal goodwill, and how much compensation, if any, to pay his ex-wife in the couple’s divorce was a matter of dispute.  The husband worked for a practice that employed 35 anesthesiologists, and it owned few tangible assets; its property consisted almost entirely of the goodwill of its employees.  The spouses each hired a financial expert to testify about the value of the husband’s personal goodwill in the business.  The husband’s expert valued the husband’s personal goodwill at nearly ten times as much as the value that the wife’s expert determined for it.  Another factor complicating this case was that all previous cases involved personal goodwill in solely owned business; this was the first case in Florida where a couple had disagreed over a spouse’s personal goodwill when the spouse was one of dozens of employees with personal goodwill in the business.  The appeals court remanded the case to the lower court to determine the value, but it noted that “goodwill” for an anesthesiologist means the anesthesiologist’s reputation among surgeons, not his or her reputation among patients.

Contact Schwartz | White About Divorcing a Specialized Professional

A South Florida family law attorney can help you if you are getting a divorce from someone whose wealth is measured in personal goodwill.  Contact Schwartz | White in Boca Raton, Florida about your case.

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scholar.google.com/scholar_case?case=13383204253922281221&q=divorce+market&hl=en&as_sdt=4,10&as_ylo=2014&as_yhi=2024