Valuing a Dental Practice in a Texas Divorce

The schedule may be full and the waiting room busy, but that does not reveal what a dental practice is worth to a divorcing couple. Revenue must pay staff, supplies, laboratories, equipment, rent, insurance, and debt before it becomes income or business value. Valuing a dental practice in a Texas divorce also requires asking how much of the practice’s success belongs to the office itself and how much depends on the dentist’s personal skill and relationships with patients. The dentist may fear losing control of a career built over many years, while the other spouse may worry that the practice will be undervalued because it cannot simply be divided in half. If you have questions about a dental practice in your divorce, you should speak to an attorney as soon as possible.  The knowledgeable Dallas divorce lawyers at McClure Law Group can help you understand your rights and options and pursue a fair resolution under Texas law.

Texas generally presumes that property acquired during marriage is community property unless a spouse proves a separate-property claim by clear and convincing evidence. The practice may include an ownership interest in a professional entity, dental and office equipment, cash, supplies, accounts receivable, technology, trade names, and contractual rights. The building may be owned by the dentist, the spouses, or a separate company and may need to be valued apart from the practice. The office may also have arrangements with a management organization that handles billing, staffing, marketing, or other nonclinical services. Texas law protects a dentist’s independent professional judgment, and licensing restrictions can limit who may practice dentistry or exercise professional control. Valuing a dental practice in a Texas divorce therefore starts with the entity documents, tax returns, profit-and-loss statements, balance sheets, production and collection reports, payroll, loan records, leases, management agreements, and records showing when and how the practice was acquired.

Collections are important, but they are only one part of the picture. A valuation professional may examine dentist production, hygiene revenue, patient retention, new-patient flow, payer mix, referral patterns, staffing, laboratory expenses, supply costs, rent, and the age and condition of equipment. Owner compensation may need adjustment because the dentist receives money both for professional labor and for owning the business. Accounts receivable should be reviewed for age and collectability rather than assumed to equal their face amount. Debt for chairs, imaging equipment, build-outs, or practice acquisition reduces the benefit of ownership and may carry personal guarantees. The expert should also consider whether income is unusually high or low, whether another dentist could maintain the practice, and whether key employees or referral relationships are likely to remain. A sound opinion uses the practice’s actual records and explains why its assumptions fit that office rather than relying entirely on a percentage of revenue.

Dental practices often have goodwill, but Texas law does not treat every form of goodwill alike. Patients may return because of one dentist’s personal ability, manner, and reputation. That personal goodwill is tied to the individual and is not divided as a separate marital asset. Other value may continue independently through the practice’s location, phone number, trained staff, systems, trade name, online presence, or established patient base. That commercial goodwill may be relevant if it can be separated from the dentist personally and has a supportable value. Valuing a dental practice in a Texas divorce requires an expert to explain how those categories were considered rather than hiding goodwill inside a broad multiplier. The analysis may also examine a potential sale to another qualified dentist, but any assumed transition, employment period, or restrictive covenant should reflect realistic facts. The purpose is to value the existing business, not to turn all of the dentist’s future labor into property.

A dental practice can be valuable without being easily sold, transferred, or divided. If you are concerned about the division of a dental practice in a divorce, it is smart to speak with an attorney. The skilled Dallas divorce attorneys at McClure Law Group help clients value a dental practice in a Texas divorce and develop division terms that recognize both financial value and professional restrictions. If you retain us, we will help you pursue an outcome supported by the practice records and the specific facts of your case. Our primary office is located in Dallas, and we have a Collin-County office, which is located in Plano, where we are available to meet clients by appointment. We frequently represent parties in divorce cases in Dallas, McKinney, Fort Worth, Frisco, Rockwall, Irving, Richardson, and Garland. We also handle family-law actions in cities in Dallas, Denton, Rockwall, Collin, Tarrant, and Grayson. You can contact us by calling 214.692.8200 or by using our online form to arrange a meeting.