What Happens to a Colorado Dental Practice in a Divorce?

By Matthew C. Clawson, Colorado Family Law Attorney | Serving Colorado Springs, Pueblo, Parker, and Denver

Owning and operating a successful dental practice is a lifelong commitment. It requires years of education, substantial financial investment, long work hours, and meticulous attention to patient care and business operations. At the same time, maintaining a marriage also requires dedication and emotional energy. When a dentist faces divorce in Colorado, these two worlds inevitably intersect. The end of a marriage affects every part of a person’s life, and when one of those parts is a thriving dental practice, the stakes become significant.

In Colorado, the value and ownership of a dental practice is a major issue in divorce proceedings. Unless a valid prenuptial or postnuptial agreement protects the practice, or unless both spouses reach a settlement, the practice must be evaluated under Colorado’s property division laws. The outcome can have long-term implications for both spouses and for the stability of the practice itself.

This article provides a comprehensive explanation of how Colorado divorce law treats dental practices and what dentists in Colorado Springs, Pueblo, Parker, and Denver need to know to protect themselves and their professional future.

I. Is a Colorado Dental Practice Marital Property?

Colorado is an equitable distribution state, meaning the court divides marital property fairly, not automatically equally. Determining whether a dental practice is marital property depends on when it was created and how it grew.

If the dental practice was opened during the marriage, it is marital property. If it existed before the marriage, the original practice may be separate property, but any increase in its value during the marriage may be marital property. Increases occur when the practice grows because of the dentist’s labor, reinvestment of marital funds, expansion of the patient base, or improvements made with marital resources.

Colorado does not require the spouse to have participated in the practice for marital value to exist. Support at home, childcare, or financial contributions all count as marital contributions. As a result, most dental practices will have at least some marital component.

II. Valuing a Dental Practice in a Colorado Divorce

Valuation is typically the most complex part of the case. Dental practices have unique characteristics such as recurring revenue, hygiene production, equipment, accounts receivable, and goodwill.

A valuation expert, such as a forensic accountant or certified valuation analyst, reviews tax returns, profit and loss statements, production and collection reports, depreciation schedules, and financial trends. The expert then determines the fair market value of the practice and identifies how much of that value is tied to the business itself versus the dentist personally.

Colorado separates enterprise goodwill and personal goodwill. Enterprise goodwill relates to the practice’s infrastructure and systems. Personal goodwill reflects the dentist’s own skill and reputation. Enterprise goodwill is marital; personal goodwill is not. This distinction is often the central dispute between opposing experts.

Because valuations can differ significantly, each spouse may hire their own expert, and the judge determines which analysis is most credible.

III. Can a Non-Dentist Own a Dental Practice in Colorado?

No. Colorado law prohibits non-dentists from owning or controlling a dental practice. Only licensed dentists may own or manage the clinical aspects of a practice.

This restriction means a non-dentist spouse cannot receive any ownership interest in the practice during divorce. The dentist must retain full ownership, while the spouse receives other marital assets or an equalization payment to account for marital value.

This is one of the strongest built-in protections available to dentists under Colorado law.

IV. How Colorado Courts Divide the Value of a Dental Practice

Because the non-dentist spouse cannot own part of the practice, the court must compensate them in other ways.

In nearly all cases, the dentist keeps the practice. The spouse receives compensation through a lump sum payment, structured payments, or a larger share of other marital property such as the home, investments, retirement accounts, or cash.

Courts almost never force a sale. The personal nature of dentistry, the restrictions on ownership, and the reliance on the dentist’s license make forced sales impractical and potentially damaging.

V. How Divorce Affects Dental Practice Operations

Divorce affects the business side of dentistry as well. Financial disclosures may require providing tax returns, production reports, employee lists, compensation records, and accounts receivable data. This can feel invasive, but Colorado law mandates transparency.

Temporary support, equalization payments, and reduced household income may strain practice cash flow. Stress or emotional distraction may affect production levels. Courts closely examine any unusual changes in income or business expenses during divorce, particularly if they appear self-serving.

Dentists should consult counsel before making significant financial or operational changes.

VI. Protecting a Dental Practice Before and During Divorce

The strongest protections occur before marriage through prenuptial or postnuptial agreements, which can classify the practice and future appreciation as separate property.

Once divorce begins, dentists should avoid commingling business and personal funds, maintain consistent compensation, and operate the practice normally. Sudden changes in distributions, hours, or spending may raise red flags.

Clean, consistent financial records are essential. Stability and transparency demonstrate credibility and help support an accurate valuation.

VII. How Colorado Dentists Should Prepare for Divorce

Preparing for divorce as a dental practice owner involves planning and careful attention to financial and operational details.

Dentists should begin by organizing financial records, including several years of tax returns, profit and loss statements, production reports, payroll records, and accounts receivable summaries. Clear, well-maintained records make valuation more accurate and reduce disputes.

Separating business and personal finances is crucial. Dentists should avoid using practice accounts for personal expenses and keep compensation and distributions stable.

Practice owners should review corporate documents such as shareholder agreements, partnership agreements, or PLLC operating agreements, as these may affect valuation or define ownership restrictions.

Maintaining staff stability and consistent production is also important. Disruptions can lower practice value and complicate the valuation analysis.

Dentists should avoid making major financial decisions before or during divorce without professional guidance. Large equipment purchases, changes in pay structure, reductions in working hours, or sudden debt can raise concerns.

Preparing a household budget is also helpful. Understanding expenses allows for better preparation for temporary orders and negotiations.

Most importantly, dentists should consult an experienced family law attorney early. Early advice prevents mistakes, protects the practice, and improves strategic planning.

VIII. Serving Dentists Across Colorado Springs, Pueblo, Parker, and Denver

Whether you own a solo practice in Colorado Springs, operate a family dental office in Pueblo, run a fast-growing practice in Parker, or manage a multi-provider clinic in Denver, your dental practice represents years of work and investment. Divorce can threaten that investment unless it is handled with experience and care.

Matthew C. Clawson represents dentists and high-income professionals in complex, high-asset divorce cases across Colorado. Working with leading forensic accountants and valuation experts, he ensures that dental practices are valued accurately and that the dentist’s financial future remains protected. He has decades of experience representing doctors, business owners, and professionals throughout Colorado Springs, Parker, Pueblo, and statewide.

For more information about high-net-worth divorce or to schedule a divorce case review in Colorado Springs or throughout Colorado, contact Clawson & Clawson, LLP.

Matthew C. Clawson will answer your questions, evaluate your case, and advise you on the best course of action based on your individual needs and priorities.

📞 (719) 634-1848 | (303) 805-9853
📧 Matthew@clawsonlaw.net