Checklist for Spouses of Dentists: What to Do If Your Partner Is Selling to a DSO During Divorce

By Matthew C. Clawson, Colorado Family Law Attorney

If your spouse is a dentist considering a sale of their practice to a DSO and you believe a divorce may be approaching, it is important to act early and understand your rights. The first step is determining whether the dental practice, or the increase in its value during the marriage, is marital property. Even if your spouse owned the practice before the marriage, any growth that occurred due to marital funds or marital effort is typically subject to division. You should also request complete financial transparency, which includes tax returns, profit and loss statements, production and collection reports, accounts receivable summaries, any DSO proposals or letters of intent, draft or final sale contracts, employment agreements tied to the sale, and all earn-out or rollover equity information.

During this time, pay attention to financial red flags. Sudden drops in reported income, new equipment purchases, unexplained debt, delays in announcing a pending sale, unusual transfers, or incomplete documentation may all indicate attempts to affect valuation. Understanding what the DSO sale includes is also essential. Many sales consist of more than a simple lump-sum payment. Cash at closing, holdbacks, earn-outs based on future performance, bonuses, rollover equity, and new employment obligations all influence the value of the practice and your potential share in the marital estate.

As a spouse, you also need to understand how these components affect support. A dentist’s new salary, bonuses, and incentive payments from a DSO often increase child support or spousal maintenance obligations, while earn-outs may be treated as both property and future income. Non-compete provisions may limit your spouse’s ability to earn elsewhere, and courts will examine whether these limitations were voluntarily accepted or financially motivated. Because of this, the timing and structure of the sale must be reviewed in the context of your divorce, and you should speak with an attorney as soon as any sale discussions begin.

Your attorney can help you determine whether supporting or opposing the sale is in your best interest and whether the structure of the deal fairly reflects the true value of the practice. Courts examine whether a sale was reasonable and whether it undervalued the marital estate. Even if your spouse sells the practice before you file for divorce, you may still have the right to share in the proceeds, including deferred compensation and rollover equity. If the court finds that the sale was structured to reduce your share of the marital estate, it may award you a larger share of other assets or adjust the division accordingly.

It is important to remember that a DSO sale does not eliminate your marital rights. A sale simply changes the form of the asset; it does not erase your interest in its value. Colorado law protects spouses from unfair transfers, hidden value, or manipulative deal structures, and transparency is required throughout the process. If your spouse is considering selling their dental practice to a DSO or you believe a divorce may be forthcoming, early legal guidance is critical to protecting your share of the marital estate and ensuring an accurate valuation of the practice and its associated benefits.

1. Confirm Whether the Practice Is Marital Property

✔ Find out when the practice was started
✔ Determine whether marital funds helped grow the practice
✔ Document your contributions (direct or indirect)

2. Request Full Financial Transparency

✔ Tax returns for the practice
✔ Profit and loss statements
✔ Production and collection reports
✔ Accounts receivable reports
✔ Any offers or LOIs from DSOs
✔ All draft or final sale documents
✔ Employment contracts tied to the sale
✔ Earn-out and rollover equity schedules

3. Watch for Red Flags

✔ Sudden drop in reported income
✔ New equipment purchases or debt
✔ Delays in announcing a sale
✔ Unexplained transfers or missing documents
✔ Attempts to push value into future earn-outs

4. Understand What the DSO Sale Includes

✔ Cash at closing
✔ Earn-out payments
✔ Holdbacks
✔ Incentive or performance bonuses
✔ Equity rollovers
✔ New employment terms (salary, hours, bonus structure)
✔ Non-competes that affect future income

5. Protect Your Share of the Sale

✔ Know that all sale proceeds may be marital property
✔ Confirm the value was fair and not discounted
✔ Challenge manipulative deal structures
✔ Ensure earn-outs and equity are valued properly
✔ Use your own financial expert if needed

6. Analyze How the Sale Affects Support

✔ New salary and bonuses affect child support
✔ Earn-outs may count as property AND income
✔ Non-compete restrictions may limit earning capacity
✔ The court may not accept “future lower income” arguments

7. Coordinate Strategy with Your Attorney Early

✔ Share any sale correspondence immediately
✔ Avoid signing anything without legal review
✔ Ask whether to support or oppose the sale
✔ Get guidance on timing and valuation issues
✔ Discuss when to issue subpoenas for documents

8. Prepare for the Court’s Scrutiny

✔ The judge will review whether the sale was reasonable
✔ Any undervaluation may result in financial penalties
✔ Hidden or delayed value can still be divided
✔ You may be entitled to a larger share of other assets

9. Remember: A DSO Sale Does NOT Remove Your Rights

✔ You still have a claim to the marital share
✔ The form of the asset changes — your rights do not
✔ Colorado courts protect spouses from unfair business transfers

Need Help?

If your spouse is a dentist selling to a DSO, or may be preparing for divorce, you must act early to protect your financial future.

Contact Matthew C. Clawson for a confidential consultation:
📞 (719) 634-1848 | (303) 805-9853
📧 Matthew@clawsonlaw.net
🌐 www.clawsonattorney.com

Legal Disclaimer- This article is for informational purposes only and does not constitute legal advice. Reading this content or contacting the attorney does not create an attorney-client relationship. Legal decisions and outcomes depend on the specific facts of each case. Colorado laws may change, and you should consult a licensed attorney for advice tailored to your circumstances. No guarantee is made regarding the accuracy or completeness of the information provided.