The distribution of assets can be complex and confusing, particularly when it comes to the division of a law practice.
In the state of New Jersey, equitable distribution is the legal principle that governs the division of assets and liabilities in a divorce.
It is important for a lawyer as well as the spouse of a lawyer who are going through a divorce in NJ to understand how this principle applies to the division of a law practice.
Equitable distribution means that assets and liabilities should be divided fairly between the spouses.
The court takes into account many factors to determine what is fair.
These factors include the duration of the marriage, the earning potential of each spouse, the contributions made to the marriage, and any other relevant factors.
In the context of a law practice, this means that the court must consider the value of the practice and the contributions made by both spouses.
The value of a law practice can be difficult to determine, as it is often tied up in both tangible and intangible assets.
For this reason, it is important to have the law practice appraised by a professional valuator.
The valuator will provide a forensic calculation of the law practice's worth, which can then be used to negotiate a settlement or as a basis for the court to make a determination (if the case does not settle and must go to trial.)
One option for dividing a law practice is for the lawyer spouse to buy out the other's share.
This can be done through a lump-sum payment or through a payment plan over time.
The value of the law practice must be determined through an appraisal to ensure that the buyout is fair and equitable.
Another option is for the law practice to be sold and the proceeds divided between the spouses. This option may be more appropriate if the licensed spouse is not interested in continuing the practice, or if it is not financially viable for the lawyer to buy out the other's share.
It is important to note that the equitable distribution of a practice in a divorce is usually complex and requires the help of experienced legal and financial professionals.
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Until next time,
Steve
Steven J. Kaplan, Esq.
Specializing In Divorce
Throughout New Jersey
5 Professional Circle
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www.KaplanDivorce.com
(732) 845-9010
