Ask-a-Lawyer

Q.Will courts take into account the value of the goodwill of our family business when they are dividing assets? It seem to me that goodwill is a large part of the value of our business.

A. Courts often will place a value on the goodwill of a business and will then divide that as an asset. For example, a business may be considered to have value beyond its physical assets, such as buildings, vehicles, supplies, inventory, and accounts receivable. Goodwill can include the reputation of a company and the likelihood that customers or clients will continue to use the business. Goodwill that is subject to a division as property in a divorce may or may not (depending on state law) include the goodwill in a professional practice, such as that of a lawyer, doctor, or accountant.

Answer by Jeff Atkinson, Professor
DePaul University College of Law, Chicago, Illinois

Q. Will courts take into the fact that my wife has a medical degree when they divide our property?

A. Yes. A few states such as New York, will place a value on a professional degree and consider that in property division.  A court, of course, cannot award a degree to a party who did not earn it, but a court can place a value on the degree and use that as a basis for giving more property of a different nature to the other party. For example, if one party to a marriage has a medical degree and the other party does not, the party who did not earn the medical degree may receive a larger share of the family home or of a pension than would be the case if the party’s spouse had not earned a medical degree.

Answer by Jeff Atkinson, Professor
DePaul University College of Law, Chicago, Illinois