Sharing a Piece of the Future Post-Divorce: Toward a More Equitable Distribution of Professional Goodwill
Nationwide, the law of marriage and divorce is engulfed in a storm of controversy over how to redress the widely lamented injustices which often follow divorce and how to achieve better economic parity between ex-spouses. In this Article, Professor Alicia Kelly examines how the treatment of goodwill in a professional practice reflects and influences this ongoing debate. The Article emphasizes that many courts have subtly transformed the classic concept of goodwill - which is an asset of the business - to include the unconventional concept of personal goodwill - an asset of an individual. Professor Kelly explains that judicial acceptance of personal goodwill acknowledges that the intangible career advantage of a professional reputation, possessed by and inseparable from an individual, is valuable and attempts to reapportion that value so that both spouses share its benefits. She argues, however, that courts have not candidly acknowledged what they are doing and instead cloak their actions in the language of conventional goodwill. Professor Kelly insists that the principles underlying the inclusion of personal goodwill should be explicitly pronounced, as their exposure invites discussion and examination on their merits which is essential to the legal process. Additionally, she argues that misapplying goodwill theory, and particularly its valuation, creates inequities of its own by increasing the risk of inaccurate and unpredictable results borne by one spouse or the other. Ultimately, Professor Kelly proposes that rather than manipulating ill-fitting valuation methods, courts should award the supporting spouse a share of the future he or she has earned: a percentage ownership interest in the future income stream of the business generated by goodwill.
Alicia B. Kelly. "Sharing a Piece of the Future Post-Divorce: Toward a More Equitable Distribution of Professional Goodwill" Rutgers Law Review 51 (1999): 569.
Available at: http://works.bepress.com/alicia_kelly/4