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Dividing Professional Practices in a Chicago Divorce

By Nottage and Ward on August 15, 2025

When a marriage ends, dividing personal property is challenging enough—but dividing a professional practice is far more complex.

Whether you’re a doctor, lawyer, accountant, or other licensed professional in Illinois, your practice may be one of the most valuable assets at stake in your divorce.

In Chicago divorces involving professional practices, it is essential to understand how Illinois courts value, classify, and equitably distribute closely held business interests.

At Nottage and Ward, LLP, we understand how much your practice represents—not just in financial value but in personal investment and professional identity. We focus exclusively on family law, with a concentration on high-asset divorces for professionals and business owners.

Is a Professional Practice Considered Marital Property in Illinois?

The Illinois Marriage and Dissolution of Marriage Act (IMDMA) governs property division in divorce. And the state follows the principle of equitable distribution, which means marital property is divided fairly but not necessarily equally.

Professional practice is typically considered marital property, especially if it generates income, goodwill, or equity. That makes it subject to valuation and possible division.

Below are key questions that courts ask when determining how professional practice will be divided in a divorce.

Was the business formed during the marriage?

If yes, it is generally marital property.

Was it formed before the marriage but grew significantly during the marriage?

Any increase in value during the marriage may be marital property, even if the practice itself is separate.

Did marital resources contribute to the practice?

If the non-owning spouse contributed time, money, or support to the business, this may create a marital claim.

Practice Valuation in an Illinois Divorce

Valuing a professional practice is one of the most contested and complicated elements in a divorce. It’s also one of the most crucial. So, while there is no “one-size-fits-all” formula, the court will typically require a formal valuation by a certified business appraiser or forensic accountant.

Key Components of Practice Valuation (IL)

Tangible Assets

These include equipment, real estate, accounts receivable, and furnishings.

Intangible Assets and Goodwill

• Enterprise goodwill: Value attributed to the business itself, including its reputation, branding, and even client base.
• Personal goodwill: Value tied directly to the professional’s skills or reputation (not divisible in Illinois).

Illinois courts recognize that personal goodwill is not divisible. For example, if a solo physician or attorney has built their reputation through personal effort, that goodwill typically stays with them. However, if the practice operates as a larger firm with multiple staff, brand recognition, or repeat clientele, enterprise goodwill may be valued and subject to division.

Earnings and Cash Flow

Past and projected earnings, adjusted for reasonable compensation, are examined to assess fair market value.

Liabilities and Debts

Any outstanding loans, leases, or obligations tied to the business are subtracted.

How Law Firm Ownership Divorce Is Handled

When it comes to law firm ownership, courts walk a fine line. Ethical and professional obligations, like client confidentiality and partnership agreements, can complicate asset division.

Here’s how courts generally approach it:

• Ownership Structure: If the attorney is a partner, the court will review the partnership agreement to determine equity, income rights, and restrictions on transfer.
• Buy-Sell Clauses: Many law firms prohibit the transfer of interests without partner approval. Courts will respect these limitations but may still assign a monetary value to the ownership interest.
• Future Earnings: Courts will avoid dividing future income but may consider expected earnings when addressing spousal maintenance.

If you’re part of a firm, whether a named partner or equity holder, you’ll want experienced counsel who understands the overlap of business asset division, family law, and professional ethics rules.

Divorce Involving Medical or Healthcare Practices

Doctor divorce cases in Illinois are especially complex, particularly when the physician owns part or all of a private practice, surgery center, or medical group.

Thus, courts consider the following:

• Is the practice solely owned or part of a group?
• Are there non-compete or partnership restrictions?
• Is the practice tied to a hospital or health system?
• Does the doctor hold any specialized licenses, patents, or research income?

Many physicians also have business interests in equipment, clinics, and passive income arrangements—all of which require forensic analysis. Additionally, practices with high receivables or pending reimbursements (e.g., from insurance companies) must be assessed with care.

Equitable Distribution: How the Court Divides the Value

After valuation, the court determines how to equitably distribute the practice’s value. This doesn’t always mean the spouse will receive part ownership. In fact, courts rarely award joint ownership of a professional practice post-divorce.

Courts aim to balance the economic interests of both spouses while preserving the viability of the professional business. So, the non-owning spouse may instead be awarded:

• A buyout: The professional keeps the practice and compensates the other spouse via cash, offsetting assets (like home equity), or a structured payment plan.
• Spousal maintenance: A share of the practice’s income may be considered when calculating support payments.
• A larger share of other marital assets, especially if liquidating the practice would harm its operations.

How to Protect Your Professional Practice in Divorce

If you’re a professional or business owner in Chicago, it’s important to take proactive steps to protect your livelihood during divorce:

1. Engage a Forensic Valuation Expert – Work with your attorney to retain an expert who understands your industry. A flawed or inflated valuation can cost you dearly.
2. Negotiate Buyouts Strategically – Avoid co-ownership arrangements. Instead, structure a payment schedule that preserves your practice’s cash flow.
3. Use Prenuptial or Postnuptial Agreements – These can clearly define what will happen to your practice in the event of divorce—ideal for solo practitioners and firm owners.
4. Review Partnership or Shareholder Agreements – Ensure your firm or practice documents address what happens to ownership interests during divorce. You may be required to sell or relinquish equity.
5. Work With Skilled Divorce Counsel – Attorneys who understand professional practices, valuations, and income analysis offer the best defense for your long-term financial health.

Chicago’s Trusted Advisors for Professional Divorces

With over 35 years of exclusive focus on family law, Nottage and Ward, LLP, represents Chicago professionals in high-asset, high-complexity divorces. We’ve advised:

• Physicians and surgeons
• Attorneys and legal partners
• Accountants and CPAs
• Architects and engineers
• Financial advisors and consultants

We also partner with leading valuation specialists, forensic accountants, and tax advisors to ensure that your professional practice is valued accurately and divided fairly. Whether you’re initiating divorce proceedings or responding to a spouse’s claims, we are committed to protecting your career, your livelihood, and your future.

Speak With Our Experienced High-Assets Divorce Lawyers in Chicago

At Nottage and Ward, LLP, we understand how important it is to protect your financial future and everything you’ve worked so hard to achieve. Call our Chicago high-asset divorce attorneys at (312) 332-2915 to learn more today.