If you are a partner in a law firm, a medical or dental practice, an accountancy firm, a veterinary practice, an architecture studio or a similar professional partnership, your practice share may be one of your most valuable assets – and one of the hardest to deal with on divorce. Unlike cash or shares, a partnership interest is tied up in the firm, often cannot simply be sold, and may include goodwill that is genuinely difficult to value. A prenup can help protect it, working alongside the partnership agreement that governs the firm. This guide explains why a practice share is awkward on divorce, what a prenup can do, and how to keep the arrangement fair.
Why a practice share is awkward on divorce
Several features make a professional practice share difficult:
- It is illiquid – tied up in the firm and not readily sellable.
- It cannot simply be transferred – the partnership agreement, and professional rules, usually restrict who can hold a stake.
- Goodwill is hard to value – much of a practice's worth may be reputation and client relationships rather than tangible assets.
- Income and capital blur – a partner's drawings, capital account and future earnings interact.
Yet a court can still take the value of the interest into account, which may mean finding cash to settle from elsewhere. See how a business is treated in a divorce for the broader rules.
What a prenup can do
A prenup can record how your interest in the practice is treated – for instance, protecting the value you brought into the marriage and setting a fair approach to growth during it. This usually works alongside the partnership agreement, which may itself restrict transfers and set out how a departing partner is bought out. The two documents complement each other, much as a prenup and a shareholder agreement do for a company. Disclose the interest and a sensible valuation in your financial schedule (see how to value your assets).
Valuing a practice and its goodwill
Because goodwill and future earnings are involved, valuing a practice for a prenup is rarely a single clean figure. Record a sensible, professionally informed basis of value, note the date, and distinguish the value at the date of marriage from later growth. A review clause helps keep the position current as your role in the firm develops. See also prenups for professionals.
Balance and advice
The strongest agreements protect the practice while making fair provision for the other partner from other resources, because a court will ensure both partners' needs are met (see are prenups legally binding?). Given the valuation and structural issues, this is an area where independent legal advice genuinely pays off, and where high-net-worth considerations often apply.
Protecting a professional practice with a prenup
To protect a professional practice – a partnership share in a law, medical, dental or accountancy firm – a prenup records the value you brought into the marriage and sets a fair approach to growth during it, working alongside the partnership agreement that may already restrict transfers. Because goodwill is hard to value and a share cannot simply be handed over, fair provision for the other partner from other resources is what keeps the agreement robust.
Why the clause carries weight: Radmacher
A prenup protecting a practice share has force because of Radmacher v Granatino (2010), in which the Supreme Court held that a court should give effect to a freely made, fair agreement unless it would be unfair to hold the parties to it. A prenup is not automatically binding – the court keeps its discretion under the Matrimonial Causes Act 1973, and needs come first – but a fair, well-disclosed clause, agreed with independent legal advice on both sides and signed at least 28 days before the wedding (as the Law Commission suggested), is exactly the kind a court will respect. For a partner whose main asset is an illiquid stake that cannot easily be sold or transferred, that certainty is particularly valuable.
A worked example: a partner in a law firm
Imagine a solicitor who becomes an equity partner in their firm two years before marrying. Their partnership interest – a capital account plus a share of goodwill and future profits – might be valued at £250,000, but it is tied up in the firm and cannot simply be cashed in. On divorce, a court could take that value into account, potentially forcing the partner to find cash from elsewhere. A prenup can record the value at the date of marriage as largely separate, set a fair approach to growth during the marriage, and – crucially – make clear that the other partner is provided for from the house, savings or maintenance rather than from the practice itself. That keeps the firm undisturbed while still being fair.
How the prenup and partnership agreement fit together
Two documents do two different jobs, and the strongest protection uses both. The partnership agreement governs the firm: it usually restricts who can be a partner, bars transfers of a share to an outsider such as a spouse, and sets out how a departing partner’s capital is bought out. The prenup governs the position between the spouses: it records how the value of the interest is treated on divorce. Neither replaces the other – the partnership agreement cannot stop a court taking the value of your interest into account, and the prenup cannot rewrite the firm’s rules. Together, much like a prenup and a shareholder agreement, they close the gap.
Valuing goodwill and taking advice
Valuing a professional practice is rarely a single clean figure, because so much of its worth is goodwill – reputation, client relationships and future earning capacity – rather than tangible assets. Record a sensible, professionally informed basis of value in your disclosure schedule, note the date, and distinguish the value at the date of marriage from later growth (see how to value your assets). A review clause keeps the position current as your role and profit share develop. Given the valuation and structural issues, this is firmly an area for independent legal advice, and the points in prenups for professionals and high-net-worth prenups often apply.
Drawings, capital account and future earnings
A partnership interest is really several things bundled together, and separating them helps a prenup deal with each fairly. There is usually a capital account – the money you have invested in the firm, which is repaid when you leave – along with a share of profits drawn as income, and often a claim on goodwill and work in progress. On divorce these can blur into one another, and a court looks at both the capital value of your interest and your future earning capacity as a partner. A prenup that distinguishes the capital you brought into the marriage from later growth, and treats ongoing drawings and future earnings as income rather than a capital asset to be divided, is both clearer and fairer than one that lumps everything together. Future earning capacity in particular is generally not treated as a matrimonial asset to be shared outright, though it is relevant to maintenance, so it pays to be precise about what the clause is actually protecting.
If your spouse works in the practice
Professional firms sometimes draw in a spouse – running the practice manager role, handling the books, building the client base – and that changes the fairness analysis just as it would in a family business. If your husband or wife has contributed directly to the practice during the marriage, a court is far less likely to accept that all of its growth is your separate property, because they helped create that value. A realistic prenup recognises this: it can protect the value you brought in while sharing a fair portion of the growth their work helped generate, and can address whether a spouse who leaves the practice is compensated for their contribution. Trying to keep everything, while a spouse who worked in the firm walks away with nothing from it, is exactly the kind of overreach that makes an agreement vulnerable (see when is a prenup unfair?). As with any professional asset, the strongest agreements protect the practice itself while making fair provision for the other partner from other resources such as the home, savings or maintenance.
Professional practice prenup FAQs
Does the clause carry weight after Radmacher?
Yes – an agreement protecting a practice share carries real weight if it was entered into freely with full disclosure and fair terms, albeit persuasive rather than automatically binding (see are prenups legally binding?).
Why do I need a prenup if the partnership agreement restricts transfers?
Because the partnership agreement governs the firm, not your marriage – the prenup addresses how the value of your interest is treated on divorce.
How is goodwill valued for a prenup?
Only approximately, on a professionally informed basis noted with its date (see how to value your assets).
Is my partnership share at risk in a divorce?
Its value can be taken into account, often met from other assets (see a business in a divorce).
How is a practice valued?
It can be complex – take advice and note a sensible valuation (see how to value your assets).
Does the partnership agreement already protect me?
It governs the firm, not your marriage – a prenup covers the gap, and the two work together (see protecting a family business).
Can a divorce force me to sell my share?
Courts try to avoid it, usually offsetting the value against other assets (see a business in a divorce).
Should partners take independent legal advice?
Yes – the valuation and structural issues make advice well worth it (see independent legal advice).
Create your prenuptial agreement online
UK Prenup lets couples in England & Wales create a clear, fair prenuptial agreement online from £199, with your document generated instantly as a PDF. See how it works or get started.
UK Prenup is not a law firm and does not provide legal advice. A prenuptial agreement in England & Wales is not automatically binding, and both partners should take independent legal advice before signing.