Single Arizona entrepreneurs who are planning on getting married should consider creating a prenuptial agreement. Failure to so could mean that if the marriage ends in divorce, their spouse might be able to claim half of the amount that the business appreciated in value during the marriage. If entrepreneurs have business partners, they may want to encourage them to sign these types of agreements as well. A partner’s divorce can be equally damaging to the company.
In addition to dealing with appreciation of premarital assets, the agreement can also cover debt. It can specify that each spouse is responsible for their own debt, and it can also detail how shared marital debt will be handled in case of a divorce.
It is important to keep good financial records of the business to establish income and value before and during the marriage. Couples should also be careful about errors that can make the agreement more vulnerable to challenges in court. For example, if it was signed on the eve of the wedding, it may be vulnerable to a charge that one of the parties was forced to signing it under duress. The parties should have separate legal representation when it is being negotiated and reviewed.
Since Arizona is a community property state, having a prenuptial agreement may be particularly important for property division. However, even with one, couples with young children will need to negotiate child custody and visitation as well as child support or have them dealt with in mediation or litigation. These topics cannot be addressed in such an agreement, as courts consider those provisions to be against public policy.