Goodwill

Background to Career and Goodwill Assets

In recent years, the courts have had to contend with instances in which there was a marked gap between the parties’ respective earning abilities. Namely, case in which one party has succeeded in flourishing and developing a career and generating a reputation, whereas the other party was a full partner to the effort, and fulfilled his or her part by running the household and rearing the young, or in working outside the home.

In many instances, even a proper equalisation of the parties’ tangible assets, will leave one party with a real ability to earn an income, and the other with only a limited capacity to do so.

With this in mind, the courts have recently recognised career and goodwill assets as property capable of being equalised, springing from a desire to attain real and material equality between the parties. Since the parties’ earning ability lies at the heart of the doctrine, the court can equalise career assets by means of a fixed monthly payment made by the stronger party to the weaker one, or by means of a one-time payment, similarly to with the equalisation of other assets.

To evaluate goodwill and career assets, the court will appoint an actuary or other expert, who will file his opinion regarding the value of these assets with the court. Aside from the goodwill which can be monetarily valued, also professional qualifications, diplomas and licenses, academic degrees, etc., may be deemed career assets.

Another way to attain equality between the parties is possible thanks to the Property Relations between Spouses Act, which empowers the courts to order a balancing of assets which is not half and half, and to determine that the weaker party, with the lower earning ability, will be entitled to a larger share of the matrimonial property. The courts often use this authority to compensate one party for his or her limited earning ability, which arises because of the self-sacrifice which that party made for the purposes of affording the other party the opportunity to develop their career.

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