For#most#profess ional#practices,#the#major#assets#“are#not#capital#assets,#but#those#related#to#the#direct#
rendering#of#profession al#services ,#most#particularl y#accounts#receivable#and#work#in#progress....”# (In#re#
Marriage#of#Green#(1989)#213#Cal.App.3d#14,#21.)#It#is# common#f or#experts#to#discount#accounts#
receivable#for#uncollectibility#based#on#past#collection#rates. #(See#In#re#Marriage#of#Nich ols,#supra,#27#
Cal .App.4th#at#pp.#667‐668 .)#
7.# Effect#of#Shareholder/P artnership#Agreements#
A#shareholde r#or#partnersh ip#agreement#may#sometimes#be#considered#in# valuing#the#community#
property#interest#in#a#partnership#or#corporation.#(In#re#Marriage#of#Nichols#(1994)#27#Cal.App.4th#661.)#
In#Nichols ,#the#court #of#appeal#affirmed#the#tria l#co urt’ s#reliance#on#a#share holder’s#buy‐sell#agr eemen t#
which#provided#that#the#husband#had#no#interest#in#the#law# corporation’s#accounts#receiva ble,#work#i n#
progre ss,#or#goodwil l.#(In#re#Marriage #of#Nichols#,#supra,#27#Cal.App.4th#at#pp.#671‐672.)#In#assessing#
whether#to#use#an#p artnership#or#sha reholder#a greement#in#v aluing#a#community#interest#in#an#entity, #
the#court#in#Nich ols# stated#that#the#following#factors#should#be#considered:#
(1)#the#proximity#of# the#date#of#th e#agreeme nt#t o#the#date#of#separation#to#ensure#that#t he#agreement#
was#not#entered# into#in#contemplation#of#marital#dissolution;#(2)#the#existenc e#of#an #independ ent#motive#
for#entering#into#the#bu y‐sell#agre ement,#such#as#a#desire# to#prot ect# all#partners#against#t he#effect#of#a#
partnership#dissolution ;#and#(3)#whether#the#value#resulting# from#the#agreement' s#purchase#price#
formula#is#similar#to#the#value#produced #by#oth er#approaches.#(I d.#at#p.#672.)#
The#Nichols#c ourt#also#noted#that#per sonal#goodwill#may#exist#in dependen t#of#the#goodwill# of#t he#firm#
itself,#stat ing# that#the#“husban d#has#personal#goodwill #regard less#of# whether#he#rema ins# with#the#firm,#
and#th is#goodwill#ca nnot#be#eliminated#by#a#recital#in# the#sto ck#purchase#agreement. ”#(Id.#a t#p.#673,#n.#
4.)#
The#court#came#to#the#s ame#conclusion#in#the#case #of#In#re#Marriage#of#Iredale#(2004)#121#Cal.App.4th#
321.#In#Ire dale,#the#wife #wa s#a#partner#in# a#la rge#law#firm.#The#comm unity#interest#in#the#firm#was#valued#
in#addition#to#wi fe’s #ow n#personal#goodwill.#In#doing#so,#t he#trial#court#use d#the#partnership#agreement#
as#a#reference#to#determine#th e#community’s#speci fic#interest#in#the#firm.#I n#upholding#the#decision,#the#
court#of#appeal#held#that#the#wife’s#interest#in#the#firm,#pursuant#to #the#pa rtnership#agreem ent#she#
signed #wh en#she#joined#the#firm#does#not#inclu de#an#entitlement,#at#any#ti me,#to# collect#a#portion#of#the#
accounts#receiva ble,#work#in#progress,#or #goodwill#of#the#law# firm.#The#trial#court#reasonably#concluded#
that#[the#wife’s]#interest#was#limit ed#to#the#value#of#her#capital#a cco unt,#which#reflec ted#the#value# of#her#
interest#in#the#hard#assets#of#the#f irm ,#but#not#the#f irm's#accounts#receivable,#work#in#progress,#or#
goodwill.#(In#re#Mar riage#of#Iredale,#s upr a,#121#Cal.App.4th#321.)#
On#the#other# hand,#courts#have#disregarded# partnership#agreements#in#div orce#cases .#The#typic al#
rationale#is#that#a#partner’s#withdrawal#rights#under#the#partnership#agreement#is#not#relevant#unl ess#
the#partners#actually#intends#to#withdraw;#instead,#it#i s#th e#community’s#interest#in#a n#ongo ing#business#
which#is#bein g#valued#in#a#marital #dis solution#action.#(See#In# re#Marriage#of#Fenton#(1982)#1 34#Cal.App.3d#
451.)#