How Dental Practice Valuations Can Assist with Financial Disputes During Divorce Proceedings

Earlier this year, I wrote about the importance of selecting the best practice evaluator and addressed the costs of the dental practice valuation, along with what dental practice owners need to be aware of when involved in divorce proceedings.

With this column, we’ll look at dental practice valuations to be used for assistance in settling financial disputes during divorce proceedings.

During divorce proceedings, there is a common thread in the initial stages of the battle where one spouse thinks the value of the dental practice is very high while the other spouse thinks the value of the practice is very low. There is often a lot of fighting between the spouses while they are trying to resolve their case before retaining attorneys and other high price experts in trying to convince the other spouse that they are correct and that their adversary is wrong.

These conflicts almost always reach a certain point where no resolution has occurred and each spouse feels as if they are back at the beginning of their fight. Usually this is the time when one of the spouses or both suggest that an independent dental practice evaluator is hired to prepare an evaluation of the dental practice that they can rely upon to settle their case. If the spouses choose one person to prepare the valuation, they can split the cost of the report in some way and have the evaluator work for them both.

Not Always An Easy Choice

Choosing an evaluator that each spouse agrees upon may take some time but the end result will be a much less expensive charge than if each side had their own evaluator to argue their position. It will also prevent a lack of a rebuttal from another evaluator that will add significantly to the cost and take much more time and angst. Since a dental practice evaluator is by definition independent, he or she may represent both litigants. The dental practice evaluator abides by professional standards where he or she attests to swearing independence to himself or herself as well as to the results of the dental practice valuation. The independent evaluator is not an advocate for his or her client like an attorney is supposed to be.

To read the earlier article, “What to Know About Dental Practice Valuations During Divorce Proceedings,” click here.

Will 1 dental practice evaluator work for each aggrieved party to the divorce and be an independent fact provider?

An attorney is an advocate for whomever he or she is representing in the transaction and will swear that the client is right even if he or she is wrong and the attorney knows that the client is incorrect. The independent dental practice evaluator is not an advocate and is supposed to be able to present a dental practice valuation that is similar in the material aspects of the valuation whether it was being prepared for one spouse or the other.

An attorney may represent only one of the parties to a litigation matter. That is an ethical consideration of the attorney’s practical and ethical standards. Sometimes an attorney will have both clients in a dispute sign a waiver that allows him or her to represent both parties. In this scenario, that attorney is playing with fire and can look for a lawsuit from one or both litigants. A dental practice evaluator may represent both sides to a litigation matter as long as it is disclosed to each participant and they each agree. The independent dental practice evaluator is a finder of fact and then a presenter of those facts in an independent dental practice valuation report that is fair and accurate for each side of the dispute in the material aspects of the dispute. To attempt to save the parties money, the attorney may end up costing the client more money in legal costs as well as time away from the dental practice and much more in the way of time and aggravation while advocating for his or her client’s position in the case.

The search for records and other supporting documents needed by the experts will cause a lot of time away from the practice for the dentist. This of course prolongs the time, cost and aggravation that each client, attorney and dental practice evaluator must take to prepare their client’s case and to strengthen his or her position.

Suppose the parties to the dispute do not agree on one dental practice evaluator?

If 2 dental practice evaluators are retained, the cost will be more than double. There are many reasons for this occurrence. One of the most important reasons is that there will be 2 valuations. Another is that each valuation will have a rebuttal as to points the other evaluator finds objectionable. After the rebuttal, there will probably be a rebuttal of the first rebuttal which will most likely be more expensive than the first rebuttal. This can sometimes create opportunities for additional attorneys, experts of various strengths and weaknesses in their particular field of expertise and eventually will lead to a trial and not to a settlement of the parties.

While a settlement usually has parts to it that are not likeable to either party in the case, these arrangements are typically much cheaper in terms of time and money than proceeding with a trial. In a typical trial before a judge or jury, the attorneys and other experts usually have a more expensive rate of fee structure since the work is more demanding and the skill level of expertise is more of a higher level with the need for specific citations and the presentation of precedents for the court to consider. These take time to find and to present in an acceptable format to the court. Many times, a court orders the presentation of motions and additional evidence to support what was presented in the court room during that day of trial. This will probably create additional services at night and weekends in order to comply with the court’s time table so the experts’ time continues to mount and to be counted. Unless the litigants are miles away from a reasonable common ground, a settlement while not satisfying everyone’s specific needs, will be cheaper and provide less emotional trauma than a full blown trial and an opinion of the court where the only winners are the lawyers and other experts.