Putting to Rest Top 3 Texas Divorce Myths for Doctors

There are several things doctorstipsonline and their spouses assume, usually incorrectly, when it comes to divorces in Texas. They assume because Texas is a community property state, the community property will be divided equally. They assume once a doctor starts practicing medicine in Texas and gets divorced that the doctor’s practice (particularly if it is very successful) is going to have a high value and result in big award for the doctor’s spouse. They also assume the doctor (particularly if very successful) is going to pay a lot of court ordered maintenance or alimony.

All Three Assumptions are Very Wrong in Texas

While Texas is a community property state, community property is not automatically divided 50/50. Texas is a so-called discretionary community property state, meaning that the community estate of the parties is divided in a manner the court “deems just and right, having due regard for the rights of each party and any children of the marriage.” In other words, the property may be divided disproportionately between the spouses. Texas is among a handful of states with community property division laws. Doctors in other states with equitable distribution property division laws may run into similar troubles.

My Former Spouse is a Doctor and I Do Not Work, the Court Will Use That in Its Decision to Award Property – Right?

There are about 15 different factors the court can take into account when dividing the property – the disparity of earnings, education and health of the parties; fault in the breakup of the marriage; any separate property owned by either party; and the nature of the property. No mathematical formula exists for a judge to use when dividing property – it is all within the judge’s discretion.

If all factors are equal, the court will almost always divide the property 50/50. As more factors favor one party, most judges will move toward awarding 60 percent to 1 party and 40 percent to the other.

The Working Spouse/Medical Student Burden – Doesn’t Matter

Everyone has heard about the working spouse who struggled working nights and weekends to support their spouse through medical school, only to find that as soon as their spouse became a successful doctor, the doctor “did them wrong” and divorced them. People assume that because the doctor is finally very successful, his or her soon-to-be ex-spouse is going to get a big chunk of money. Again, they usually are wrong.

How Do You Even Go About Calculating the Value of the Doctor in a Divorce?

Texas Courts have long held that in valuing the community estate of the parties, all value that is attributable to “the personal ability, skill, integrity or other personal characteristics” of the doctor must be excluded from the value of the community estate.

At first, many people are shocked by this. However, if you stop to think about it, all of these traits are so-called “personal traits.” Some people are better students than others; some people are willing to work harder than others; some people are simply smarter than others; some people are more handsome, beautiful or just plain ugly; some are very smooth and polished while some are uncouth. When people get divorced, they take their personal traits with them.

For example, if Cindy Crawford were to get married, she brings great looks to the marriage. If she gets divorced, those looks and her ability to capitalize on them go with her. In Texas, a “spouse is not entitled to a percentage of his or her spouse’s future earnings.”

Business Value is Separate from a Doctor’s Personal Traits

To the extent a doctor owns a business, the business may be valued in a Texas divorce, as long as the valuation of the medical practice techniques exclude the doctor’s personal goodwill – the general reputation of the doctor, the value of his or her work ethic, his or her personal trait, customer patronage and loyalty.

For example, if a doctor runs an anesthesiology practice, radiology practice or emergency room practice, which provides services to, say, ten hospitals and has long-term contracts with the hospitals in addition to a scheduling staff, billing staff, computers and contracts with health care providers, then the business may be valued. However, the doctor’s personal good will has to be excluded from the valuation.

Even a solo doctor’s practice may have some value. If the doctor personally owns equipment, a building and has large accounts receivables, there will be some value to the practice. The way the business evaluator usually determines the value is by assessing the fair market value of the equipment, building and the accounts receivables, assuming the doctor will go down the street, rent an office, buy some new equipment, start calling the health care providers and run an ad touting the doctor’s new practice after the divorce is finalized.

As the Non-Physician, Can I Seek Alimony?

Yes, but if granted it will be very limited. Many people living in Texas come from other “non-community” property states where alimony is handed out freely, but because Texas is a community property state, it limits alimony much more strictly.

Texas has adopted “rehabilitation alimony,” which in Texas is called court ordered maintenance. The purpose of rehabilitation alimony is to rehabilitate the recipient, so that person can reenter the job market. It’s important to know it’s not freely awarded. In fact, there is a strong presumption against awarding court ordered maintenance in Texas.

When You Just Might Get Alimony (But Not Always)

Court ordered maintenance may be awarded to a spouse if the marriage was at least ten years in length, the spouse who is seeking alimony lacks sufficient property to provide for his or her minimum reasonable needs and is unable to support himself or herself. There are many nuances in the law of court ordered maintenance in Texas, but many cases fall into one of three categories:

• You are unable to support yourself through appropriate employment because of an incapacitating physical or mental disability.
• You are the custodian of a child with a physical or mental disability that precludes employment outside the home.
• You lack the earning ability in the labor market to provide for your minimum reasonable needs. It typically helps if the court sees that the recipient is seeking education or training to re-enter the work force.

Conclusion – Not All is Fair in Love and Medicine for Doctor Divorces in Texas

Several conclusions can be drawn about doctors and alimony in Texas. First, even if a doctor is a high-income individual, the doctor may end up paying no alimony or court maintenance in a Texas divorce. Secondly, even if you are married to a high-income doctor, in a Texas divorce, you may not get any alimony or court ordered maintenance. Even if a spouse is awarded alimony or court ordered maintenance, it is probably not going to be great, since it is based on the recipient’s minimum reasonable needs. And finally, if you have been married less than ten years, you are not eligible for alimony or court ordered maintenance in Texas under most circumstances.

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