Business valuation is an important task and skill, constituting both an art and a science, as a recent article in The Lane Report noted. Business valuation could be called a science because it involves precise knowledge about how to accurately calculate the value of a business. It could also be called an art, though, because there is no set way to do it, and it usually involves some degree of skillfulness based on experience regarding the most appropriate way to approach valuation.
In our last post, we began speaking about addressing debt in prenuptial agreements. As we noted, Arizona law provides specific guidelines for how community and separate debts are to be paid in the event of divorce, and it is important to be aware of these before hammering out a prenuptial agreement.
When most people hear about prenuptial agreements, they tend to think of an agreement that deals with how assets are to be divided in the event of divorce. This is correct, of course, but it is certainly not the whole picture, as prenuptial agreements can address a variety of other matters as well. One of the issues a prenup can and should address, but which is sometimes not thought about as much, is the division of debts in the event of divorce.
In a previous post on this blog, we wrote a post dealing with the topic of when prenuptial agreements can be set aside in the state of Arizona. As we mentioned there are two primary situations where this can happen: when a party to the agreement did not voluntarily sign the agreement; and when a party to the agreement didn't have sufficient knowledge about the other party's assets and liabilities. A prenup can also be set aside when it is not executed validly, which is more of a technicality.
When many people think of prenuptial agreements, they assume they are only useful to those who are wealthy and stand to lose a lot in divorce. While it is certainly true that prenuptial agreements are in greater use among the wealthy, such agreements can certainly benefit those of more modest wealth.
Prenuptial agreements are an important tool couples can use to protect themselves from financial loss in the event of divorce. As we've mentioned previously on this blog, though, it is important to take care when negotiating and drafting these agreements to ensure everything is done correctly. A careless prenuptial agreement won't do a couple any good and will only result in unnecessary costs and court appearances.
In our last post, we spoke about the grounds on which prenuptial agreements can be invalidated in the state of Arizona. As we mentioned, there are two basic grounds for a finding of invalidity. One is when a party did not voluntarily enter into the agreement. The other is when the agreement is fundamentally unfair and a party was not provided adequate information about the other party's assets and debts.
In a recent post, we wrote about the ongoing divorce case of Ken Griffin, founder of the hedge fund Citadel. One of the big issues in the divorce is a prenuptial agreement between Ken Griffin and his wife. She, as we noted, has asked that the agreement be thrown out because she was coerced into signing it and because it is unfair.
For some people, entering into a second or third marriage is not the stressful event that it was the first time around. Having been through the process before, it makes sense that there would be less anxiety about the unknown. Still, this should not stop remarrying couples from evaluating their financial situation and taking appropriate steps to protect themselves.
Prenuptial agreements, as we've mentioned previously on this blog, are a great way for engaged couples to set the terms of a potential divorce prior to marriage and protect themselves financially. Well-negotiated and properly executed prenuptial agreements effectively trump state property division laws, and so remove a lot of the uncertainty that goes with dividing property in divorce.