Divorce and Practice Appraisals

I recently corresponded with a potential client who is going through a divorce. Her husband, a dentist, and his attorney were telling her that his two practice's had no monetary value since the dentist did not own the real estate where they were located.


While I understand that divorce is generally a very difficult issue and often ugly, I have to say such a statement is not only unethical and deceitful but also childish and laughable.


Real estate appraisals are separate from practice appraisals. If it is a going business, the value of the practice is based upon its ability to generate a revenue stream for the owner.


But even if the practice had folded, there would still be value in the assets of the practice: equipment, furniture, supplies and sundries. While liquidating assets generally returns only a fraction of their original cost, it does create value.

Yet even if all of the equipment and furniture were leased and there were no supplies and sundries, there would be still value in the patient charts. Such is the case when a dentist passes away. If the estate takes several months to come to a decision on what to do with the practice, there will eventually be a value on the patient charts which a new owner would be willing to pay. It would not be nearly what it is for a going business, but neither would it be insignificant.

Having been so dumbfounded by the doctor's and his lawyer's bald-faced lie, I felt compelled to post a little reality to help with the confusion.