What is the difference between personal and enterprise goodwill?

Personal goodwill is tied to an individual's reputation, skills, and relationships—it can't be sold separately. Enterprise goodwill is tied to the business itself (brand, location, systems, staff)—it can be sold. Florida courts only divide enterprise goodwill in divorce; personal goodwill is not marital property.

Is goodwill divided in Florida divorce?

Only enterprise goodwill is divisible. Personal goodwill—value tied to an individual owner's reputation and skills—is not marital property under Florida law per Thompson v. Thompson. Courts must distinguish between the two types when valuing a business.

How do courts determine personal vs. enterprise goodwill?

Courts consider: whether clients request the owner specifically, whether the business could survive the owner leaving, brand recognition independent of the owner, systems and processes in place, staff who serve clients, and whether similar businesses have successfully sold.

What percentage of a professional practice is personal goodwill?

It varies by practice type and facts. Solo medical practices often have 70-90% personal goodwill. Dental practices typically 50-70%. Multi-provider groups have more enterprise goodwill. Each case requires specific analysis by a business valuation expert.

Do I need a business valuator for goodwill issues in Florida divorce?

Yes. Goodwill allocation is highly technical and can involve significant dollars. Both parties often hire competing experts. Courts rely heavily on expert opinions to allocate between personal and enterprise goodwill.

Personal Goodwill vs. Enterprise Goodwill in Florida Divorce

Quick Answer: Florida recognizes a critical distinction between personal goodwill (tied to an individual's reputation and skills—generally not divisible) and enterprise goodwill (tied to the business itself—subject to division). This distinction can mean hundreds of thousands of dollars in your divorce settlement.

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What Is Goodwill?

Goodwill is the value of a business above its tangible assets. It represents:

Reputation and brand recognition
Customer relationships
Location advantages
Trained workforce
Business systems and processes
Future earning capacity

In many service businesses and professional practices, goodwill can be the largest component of value.

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The Two Types of Goodwill

Personal Goodwill

Personal goodwill is value attributable to an individual's:

Personal reputation
Individual skills and expertise
Relationships with specific clients/patients
Name recognition
Personal trust and confidence

**Example:** A surgeon whose patients specifically seek her out because of her personal reputation and surgical skill. If she left, most patients would follow her or find another surgeon—they're not loyal to the practice.

Enterprise Goodwill

Enterprise goodwill is value attributable to the business itself:

Business name and brand
Location and facilities
Systems and procedures
Trained staff
Marketing and advertising
Contracts and referral relationships
Phone numbers and web presence

**Example:** A dental practice with strong name recognition, a great location, established systems, and trained hygienists. If the owner retired, a new dentist could step in and retain most patients because they're loyal to the practice, not just the individual.

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Why This Matters in Florida Divorce

Personal Goodwill Is NOT Marital Property

Florida courts have consistently held that personal goodwill is not subject to equitable distribution because:

It cannot be sold or transferred
It's tied to the individual's future labor
Dividing it would be like dividing future earning capacity

Key Case: *Thompson v. Thompson*, 576 So.2d 267 (Fla. 1991)—The Florida Supreme Court recognized that not all goodwill is divisible; personal goodwill tied to the owner's personal attributes is not marital property.

Enterprise Goodwill IS Marital Property

Enterprise goodwill that exists independently of the owner is a marital asset subject to division under F.S. 61.075 because:

It can be sold with the business
It represents value built during the marriage
A buyer would pay for it

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How Courts Distinguish Between the Two

Factors Favoring Personal Goodwill

Clients/patients request the owner specifically
Owner is the "face" of the business
Business name includes owner's name
Limited or no other professional staff
Owner handles most client relationships personally
Business would significantly decline if owner left
No brand recognition separate from owner

Factors Favoring Enterprise Goodwill

Business has independent brand recognition
Multiple professionals/staff serve clients
Strong location advantages
Established systems and processes
Marketing generates business beyond referrals
Non-compete agreements have value
Business could be sold as going concern
Clients/patients loyal to practice, not individual

The Reality: Most Businesses Have Both

Most businesses have some mix of both types:

A solo attorney with a strong brand: mostly personal goodwill
A law firm with multiple partners and institutional clients: more enterprise goodwill
A dental practice with one dentist but great location: mixed

Valuation experts must allocate between the two.

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Valuation Methods That Distinguish Goodwill Types

The "With and Without" Method

Most accepted approach:

Value the business with current owner

Value the business as if owner left (what would a buyer pay?)

The difference approximates personal goodwill

Multi-Attribute Utility Model

Analyzes specific factors:

Assigns weights to personal vs. enterprise attributes
Surveys clients about loyalty factors
Creates allocation percentage

Comparable Sales Analysis

Looks at what similar practices actually sold for:

Practices with owner staying vs. leaving
Industry-standard multipliers
Actual market transactions

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Common Scenarios

Professional Practices (Doctors, Lawyers, CPAs)

These often have high personal goodwill:

Profession	Typical Personal Goodwill %
Solo medical practice	70-90%
Law firm (solo)	60-80%
Dental practice	50-70%
CPA firm	40-60%
Multi-provider medical group	30-50%

But each case is fact-specific.

Service Businesses

Business Type	Personal vs. Enterprise
Consulting firm	Usually high personal
Staffing agency	Usually high enterprise
Financial advisor	Mixed (depends on structure)
Real estate broker	Often high personal
Franchise	Usually high enterprise

Retail and Manufacturing

These typically have more enterprise goodwill:

Brand value exists independently
Location and inventory matter more
Less dependent on individual relationships

→ **Need expert guidance?** Goodwill allocation is complex. A [$195 Deep Dive Consultation](/services/consultation) can help you understand your position and build your case.

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How to Present Your Case

If You Want to Maximize Personal Goodwill (Business Owner)

Gather evidence showing:

Clients specifically request you
Revenue would decline if you left
Your personal reputation drives business
Limited transferable systems or brand
Your specialized skills are irreplaceable

Consider:

Client surveys or affidavits
Industry expert testimony
Analysis of referral sources
Comparison to similar practices that sold

If You Want to Maximize Enterprise Goodwill (Non-Owner Spouse)

Gather evidence showing:

Business has strong brand recognition
Multiple staff serve clients
Owner could be replaced
Systems and processes are documented
Location and marketing drive business
Similar businesses have sold successfully

Consider:

Marketing materials showing brand emphasis
Staff roles in client relationships
Actual sale transactions in the industry
Expert testimony on enterprise value

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Practical Implications

For Business Owners

If your business is largely personal goodwill:

The marital value may be much lower than total value
You may keep more of the business
But you need expert evidence to prove it

For Non-Owner Spouses

Don't assume personal goodwill claims at face value:

Hire your own valuation expert
Challenge unsupported allocations
Look for enterprise elements

For Both Parties

This is highly technical and expert-driven:

Forensic accountants and business valuators are essential
The allocation between personal and enterprise goodwill is often the biggest fight
Small percentage differences mean large dollar amounts

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Recent Florida Case Law

Florida courts continue to refine this area:

**Held: Personal goodwill not divisible:**

Where value depends on owner's continued personal services
Where business would not survive owner's departure
Where clients specifically chose the individual

**Held: Enterprise goodwill is divisible:**

Where practice has standalone value
Where brand and systems could transfer
Where other professionals could step in

Courts look at the specific facts of each case—there's no bright-line rule.

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Get Expert Help

Goodwill allocation can be the most valuable issue in a business divorce. Schedule a $95 Strategy Session to discuss your situation.