Case Citation
Legal Case Name

Marriage of McReath v. McReath Case Brief

Wisconsin Supreme Court2011Docket #65337068
335 Wis. 2d 643 2011 WI 66 800 N.W.2d 399 2011 Wisc. LEXIS 354 Family Law Business Associations

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A court included an orthodontist’s entire salable professional goodwill in the marital estate. It held that also basing a maintenance award on income from the practice was not impermissible “double counting,” affirming a substantial award to the non-professional spouse.

Legal Significance: Establishes that salable professional goodwill, including personal goodwill, is a divisible marital asset in Wisconsin. Clarifies that including an income-producing asset in a property division and also considering its income stream for maintenance does not constitute impermissible “double counting.”

Marriage of McReath v. McReath Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Timothy (Tim) and Tracy McReath divorced after a long-term marriage during which Tim became an orthodontist and acquired a practice, Orthodontic Specialists. Tracy, who had a high school education, was primarily a homemaker and supported Tim’s professional development. Tim purchased the practice for $930,000, with the majority of the price attributed to intangible assets like the seller’s name and a non-compete agreement, which are elements of professional goodwill. At the time of divorce, the practice was highly profitable, generating an average net cash flow for Tim of nearly $700,000 annually. The trial court valued the practice at $1,058,000, a figure that included its professional goodwill, and awarded it to Tim as part of an equal property division that required him to make a large equalization payment to Tracy. The court also awarded Tracy maintenance of $16,000 per month based on Tim’s earning capacity from the practice. Tim appealed, arguing that the personal component of the goodwill was not a divisible asset and that its value was impermissibly “double counted” in the property division and the maintenance award.

Court Holding & Legal Precedent

Issue: Did the circuit court err by including the entire value of a professional practice’s salable goodwill in the marital estate and then using the income generated from that same practice to calculate a maintenance award?

No, the circuit court did not err. The court affirmed the inclusion Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut

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Legal Issue

Did the circuit court err by including the entire value of a professional practice’s salable goodwill in the marital estate and then using the income generated from that same practice to calculate a maintenance award?

Conclusion

This case solidifies the "salability" test for professional goodwill as a marital Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit es

Legal Rule

Under Wisconsin law, the entire value of salable professional goodwill is a Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mol

Legal Analysis

The Wisconsin Supreme Court rejected the appellant's request to adopt a distinction Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolor

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Flash Summary

  • The entire value of salable professional goodwill, including personal goodwill, is
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate

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