While a recent Harvard Medical School study suggests doctors are among the types of professionals with high-stress level occupations that are least likely to get divorced, when a doctor and significant other do decide to go their separate ways, it can get messy. However, there are a number of common misconceptions about what actually goes down when a doctor gets a divorce in Texas.
What to Know About Doctors and Divorce
There are several things doctors and their spouses assume, usually incorrectly, when it comes to divorces in Texas. They assume because Texas is a community property state, the community property will be divided equally. They assume once a doctor starts practicing medicine in Texas and gets divorced that the doctor’s practice (particularly if it is very successful) is going to have a high value and result in big award for the doctor’s spouse. They also assume the doctor (particularly if very successful) is going to pay a lot of court ordered maintenance or alimony.
All Three Assumptions are Very Wrong in Texas
While Texas is a community property state, community property is not automatically divided 50/50. Texas is a so-called discretionary community property state, meaning that the community estate of the parties is divided in a manner the court “deems just and right, having due regard for the rights of each party and any children of the marriage.” In other words, the property may be divided disproportionately between the spouses. Texas is among a handful of states with community property division laws. Doctors in other states with equitable distribution property division laws may run into similar troubles.
My Former Spouse is a Doctor and I Do Not Work, the Court Will Use That in Its Decision to Award Property – Right?
There are about 15 different factors the court can take into account when dividing the property – the disparity of earnings, education and health of the parties; fault in the breakup of the marriage; any separate property owned by either party; and the nature of the property. No mathematical formula exists for a judge to use when dividing property – it is all within the judge’s discretion.
If all factors are equal, the court will almost always divide the property 50/50. As more factors favor one party, most judges will move toward awarding 60 percent to 1 party and 40 percent to the other.
The Working Spouse/Medical Student Burden – Doesn’t Matter
Everyone has heard about the working spouse who struggled working nights and weekends to support their spouse through medical school, only to find that as soon as their spouse became a successful doctor, the doctor “did them wrong” and divorced them. People assume that because the doctor is finally very successful, his or her soon-to-be ex-spouse is going to get a big chunk of money. Again, they usually are wrong.
How Do You Even Go About Calculating the Value of the Doctor in a Divorce?
Texas Courts have long held that in valuing the community estate of the parties, all value that is attributable to “the personal ability, skill, integrity or other personal characteristics” of the doctor must be excluded from the value of the community estate.
At first, many people are shocked by this. However, if you stop to think about it, all of these traits are so-called “personal traits.” Some people are better students than others; some people are willing to work harder than others; some people are simply smarter than others; some people are more handsome, beautiful or just plain ugly; some are very smooth and polished while some are uncouth. When people get divorced, they take their personal traits with them.
For example, if Cindy Crawford were to get married, she brings great looks to the marriage. If she gets divorced, those looks and her ability to capitalize on them go with her. In Texas, a “spouse is not entitled to a percentage of his or her spouse’s future earnings.”
Business Value is Separate from a Doctor’s Personal Traits
To the extent a doctor owns a business, the business may be valued in a Texas divorce, as long as the valuation of the medical practice techniques exclude the doctor’s personal goodwill – the general reputation of the doctor, the value of his or her work ethic, his or her personal trait, customer patronage and loyalty.
For example, if a doctor runs an anesthesiology practice, radiology practice or emergency room practice, which provides services to, say, ten hospitals and has long-term contracts with the hospitals in addition to a scheduling staff, billing staff, computers and contracts with health care providers, then the business may be valued. However, the doctor’s personal good will has to be excluded from the valuation.
Even a solo doctor’s practice may have some value. If the doctor personally owns equipment, a building and has large accounts receivables, there will be some value to the practice. The way the business evaluator usually determines the value is by assessing the fair market value of the equipment, building and the accounts receivables, assuming the doctor will go down the street, rent an office, buy some new equipment, start calling the health care providers and run an ad touting the doctor’s new practice after the divorce is finalized.