Valuing a Medical Practice in a Divorce
A medical practice interest is marital property subject to equitable distribution, but a major 2026 North Carolina Supreme Court ruling has changed how much of that value actually gets divided.
Why Medical Practices Are Hard to Value
Liquid assets like cash, stocks, and bonds are easy to value and split. A medical practice is different, there’s no ready market value, but any interest in a professional practice acquired or grown during the marriage is still a marital asset subject to equitable distribution. Courts consider the practice’s fixed assets, the value of its work in progress and accounts receivable, its liabilities, and its goodwill.
Personal Goodwill vs. Enterprise Goodwill
Goodwill, the intangible value that makes a practice worth more than the sum of its physical assets, has always been the most subjective and contested part of a medical practice valuation. In August 2026, the North Carolina Supreme Court decided Sneed v. Johnston, a case that reshaped how goodwill is treated in equitable distribution.
Personal Goodwill
Value tied to the doctor personally, their reputation, skill, experience, personality, and individual patient relationships. The Supreme Court held this is not marital property and is not subject to equitable distribution.
Enterprise Goodwill
Value that belongs to the practice itself, independent of the doctor, things like the practice’s name, staff, systems, location, and recurring patient base. This remains divisible as marital property.
This is a significant change from decades of prior case law, which had generally declined to separate personal from enterprise goodwill when valuing a professional practice. Under the new standard, a key question in any valuation is: what value would the practice retain if the doctor walked away?
How Goodwill Gets Valued Today
Expert testimony from a qualified business appraiser is essentially always necessary to value a medical practice’s goodwill under the new standard. Both spouses typically retain their own valuation experts, who must now calculate the practice’s total goodwill and then separate out how much of that value depends on the individual doctor’s continued presence versus how much would remain with the practice on its own. The court makes the final determination of value based on the evidence and testimony presented.
Other factors that affect a practice’s value include whether it relies primarily on third-party payers like managed care organizations (which can make revenue less predictable) versus a fee-for-service model.
Common Questions
Is my spouse’s medical practice a marital asset?
An interest in a medical practice built up or grown during the marriage is generally a marital asset subject to equitable distribution, even though it has no simple market value.
What changed with the 2026 NC Supreme Court ruling?
The court held that a professional’s personal goodwill, value tied to their individual reputation and relationships, is not marital property, while enterprise goodwill belonging to the practice itself still is. This can significantly reduce the divisible value of an owner-dependent practice.
Do I need an expert to value a medical practice?
Yes. Distinguishing personal from enterprise goodwill and valuing a practice’s other assets requires a qualified business valuation expert experienced in professional practices.
Is a medical license itself divided in a divorce?
No. North Carolina treats a professional license as separate property, though the value it helped create during the marriage can still be relevant to the overall division of assets.
Have a Business or Practice at Stake in Your Divorce?
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Managing Partner and Co-Founder, McIlveen Family Law Firm. Angela is a Board Certified Specialist in Family Law, certified by the North Carolina State Bar Board of Legal Specialization, and an experienced family law trial attorney who represents clients across North Carolina. She personally reviewed this page for legal accuracy.