Divorcing a Dentist in Colorado: What Every Spouse Needs to Know Before Your Partner Sells to a DSO
By Matthew C. Clawson, Colorado Family Law Attorney | Serving Colorado Springs, Pueblo, Parker, and Denver
Divorcing a dentist comes with unique financial issues that do not appear in most Colorado divorce cases. Dental practices often generate substantial income, involve complex accounting and goodwill considerations, and may be valued at several times annual earnings. And today, more dentists are selling their practices to large Dental Support Organizations (DSOs), sometimes for high valuations that include cash payments, earn-outs, and rollover equity.
If you are the spouse of a dentist in Colorado and your partner is considering selling the practice to a DSO before or during your divorce, it is critical to understand how that decision could affect your financial future. A dental practice sale is not a simple business transaction. It directly affects marital property, income, support obligations, and your long-term financial stability.
This guide explains what you must know about dental practice value, DSO sales, and your rights in a Colorado divorce.
I. A Dental Practice Is Often One of the Largest Marital Assets
A dental practice is usually one of the most valuable assets in a marital estate. Even if your spouse owned the practice before the marriage, Colorado law allows you to claim your share of any increase in its value during the marriage.
Practice value can increase due to:
• the dentist’s labor and skill
• improvements made with marital funds
• growing patient volume
• expanded services or added equipment
• professional development during the marriage
If your spouse sells the practice, that sale does not eliminate your claim. It simply changes the form of the asset. Instead of owning part of a business (which you legally cannot), your marital share attaches to cash from the sale, earn-outs, equity, or employment benefits your spouse receives from the DSO.
II. If Your Spouse Sells Before or During Divorce, You May Still Have Rights to the Proceeds
Many spouses worry that a dentist can sell the practice right before divorce and hide the money or feel that the sale cuts them out. That is not how Colorado law works.
If the sale occurs before filing for divorce:
• the value your spouse received (cash, earn-outs, equity) is still marital property
• the court can investigate whether the dentist sold the practice for fair value
• the court can redistribute other assets if the sale was unfair or strategic
• you may be entitled to additional assets to make up your share
If the sale occurs during the divorce:
• the court must approve or review the sale
• the automatic injunction prohibits large transfers without agreement
• you have legal standing to challenge undervaluation, hidden terms, or manipulation
The timing of the sale affects the analysis, but it does not eliminate your marital rights.
III. Earn-Outs, Bonuses, and Rollover Equity May Be Part of the Marital Estate
Many DSOs do not pay the full purchase price at closing. Instead, they include:
• holdbacks
• earn-outs tied to future production
• equity rollovers that may appreciate later
• incentive bonuses for staying on
These components can be worth hundreds of thousands of dollars or more.
In a divorce, these future payments may be considered:
• marital property
• income for support
• part of an overall valuation
• or a combination of the above
If a dentist intentionally structures the sale to push value into future years, the court can correct this to protect your share.
IV. DSO Employment Contracts Affect Support Calculations
Most DSOs require the selling dentist to keep working for two to three years. These contracts often include:
• minimum production requirements
• non-compete clauses
• fixed salary plus bonuses
• restrictions on where they can practice
• limits on reducing hours or income
All of these affect:
• child support
• spousal maintenance (alimony)
• future earning capacity
• financial stability
If your spouse enters into a restrictive agreement, the court will evaluate whether it was reasonable or whether it artificially reduces income to affect support.
V. You Are Entitled to Financial Transparency
During a Colorado divorce, both spouses must complete full and accurate financial disclosures under oath. With a dental practice or DSO sale, that means you are entitled to:
• tax returns
• practice financials
• production and collection reports
• valuation documents
• offers from DSOs or private buyers
• sale contracts
• earn-out schedules
• employment agreements
• rollover equity documents
You do not have to simply trust your spouse’s numbers. You have the right to:
• request documents
• hire your own valuation expert
• question any terms that seem unfair
• examine discrepancies between what was shown to the DSO and what is shown to you
Your attorney can issue subpoenas if necessary.
VI. What If the Dentist Manipulates Numbers or Attempts to Hide Value?
This is a common concern.
Sometimes dentists may:
• delay announcing a pending sale
• minimize reported income
• accelerate equipment purchases
• artificially depress EBITDA
• shift funds into business accounts
• negotiate earn-outs instead of higher upfront cash
Colorado courts look carefully at these behaviors.
If the court finds intentional undervaluation or dissipation of marital assets, the judge can:
• add value back into the marital estate
• award you a larger share of other assets
• impose financial penalties
• order reimbursement to the marital estate
No spouse is permitted to manipulate business value or hide assets.
VII. Should You Support or Oppose a DSO Sale?
There is no universal answer. It depends on:
• the timing of the divorce
• the sale structure
• how much the deal is actually worth
• whether your spouse must continue working
• your need for support
• the valuations at play
In some cases, supporting the sale is beneficial because:
• DSOs pay higher multiples
• the sale creates liquidity
• valuation becomes more straightforward
In other cases, opposing the sale is safer because:
• earn-outs complicate property division
• rollover equity is hard to value
• future income becomes uncertain
• support may be reduced if hours decline
You should never rely on the DSO’s valuation or your spouse’s explanation alone. A valuation expert is often necessary for high-asset dental divorces.
VIII. How to Protect Yourself If Your Dentist Spouse Is Considering a DSO Sale
If you suspect your spouse is planning a DSO sale, or if they have already received an offer, you should:
- Consult a family law attorney immediately
- Request financial disclosures early
- Document lifestyle, expenses, and marital contributions
- Monitor sudden business changes or unexplained financial activity
- Prepare for valuation issues involving goodwill, EBITDA, and earn-outs
- Avoid signing anything without legal review
- Consider hiring your own forensic accountant
Your financial future depends on understanding both the divorce and the business transaction.
IX. The Bottom Line for Spouses of Dentists
If your spouse is thinking about selling their dental practice to a DSO during a troubled marriage, you cannot afford to ignore the legal and financial implications. The sale will affect property division, support, and your long-term financial security.
The earlier you get advice, the more protected you are.
Serving Spouses of Dentists Across Colorado Springs, Pueblo, Parker, and Denver
At Clawson & Clawson, LLP, we represent spouses of dentists and medical professionals in complex, high-asset divorce cases throughout Colorado. These cases require precise financial scrutiny, expert valuation, and strategic litigation.
We ensure that:
• all practice value is accounted for
• no money is hidden
• earn-outs and equity are properly evaluated
• support is calculated accurately
• your financial future is protected
If your spouse is a dentist considering a DSO sale, or if you are preparing for divorce, we are here to help.
Contact for a confidential consultation:
📞 (719) 634-1848 or (303) 805-9853
📧 Matthew@clawsonlaw.net