In Divorce, Financial Planning

Goodwill value is essentially the total value of the business minus the total value of the company’s tangible assets. Texas courts often require that the value of business goodwill be split into two types for divorce purposes: “personal goodwill” (sometimes called “professional goodwill”) and “enterprise goodwill.”

Personal goodwill is the portion of goodwill directly associated with the person running or otherwise working in the business. For example, if the spouses run a law practice, and one spouse is a well-known, very successful and sought after divorce attorney, a judge may find that the divorce lawyer-spouse has a lot of personal good will. In Texas, personal goodwill is not marital property and its value cannot be “divided” – it goes with the individual.

In contrast, enterprise goodwill is attached to the business itself, even if for example, the divorce lawyer-spouse were to leave the law practice. Most state courts typically treat enterprise goodwill as marital property that is subject to division between the spouses.

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