Professional Goodwill in Marital Dissolution Cases

48 Pages Posted: 6 Dec 2008

See all articles by Mary Kay Kisthardt

Mary Kay Kisthardt

University of Missouri at Kansas City - School of Law

Date Written: December 1, 2008

Abstract

The adoption of principles of equitable distribution has substantially altered the law pertaining to the division of property at dissolution. These principles are based on the assumption that marriage should be treated as any other partnership and upon dissolution the assets should be divided between the partners. In most jurisdictions courts are authorized only to divide the marital property not the spouses' separate property. Because of this limitation, the classification of the property after marriage becomes the crucial issue. The focus of this article is whether the intangible asset of goodwill of a professional practice should be classified as marital property and therefore subject to division. Courts in virtually every jurisdiction have addressed the issue. On one extreme are those that refuse to acknowledge professional goodwill as a marital asset. On the other are those that recognize goodwill even if what is being valued appears to be reputation. In the middle are those cases that recognize goodwill as marital property, but only to the extent that it can be shown to exist independently of professional reputation; which means it must be marketable.

Keywords: Professional goodwill, Divorce, Dissolution, Marriage, Partnership, Marital property, Marital asset, Professional reputation, Separate property, Community property, Intangible, Marketability

JEL Classification: J12, J16, J17, J18, K19, K39

Suggested Citation

Kisthardt, Mary Kay, Professional Goodwill in Marital Dissolution Cases (December 1, 2008). Available at SSRN: https://ssrn.com/abstract=1311371 or http://dx.doi.org/10.2139/ssrn.1311371

Mary Kay Kisthardt (Contact Author)

University of Missouri at Kansas City - School of Law ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

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