Fans of the compassionate family law attorney concept put forth by Scott L. Levine in his post on consumer advocacy and support will appreciate the depth of his sensitivity to these matters when one considers the subject of this post and how financial elements such as a financial instrument known as a put option agreement might come into play during a family law proceeding such as a divorce.
Many financial instruments and contractual arrangements are drafted in ways that do not make that easy for non-specialists to quickly understand their implications. A put option agreement is one such financial instrument (possibly used as a financial gamble, but one that has other uses as well) that can have implications for dividing things up or arranging for future financial security in a family law context.
The key to applying the concept of a put option agreement to a family law context is the definition of this technical term in a way that non-specialists can relate to. In simple terms, a put option agreement is a financial instrument that gives the holder the option to sell an asset, such as a company stock, back to the issuer of the asset at a set price, rather than wait for it to be valued in the marketplace or perhaps go down in value.
Family law clients who may encounter such financial contracts may want to consider the following:
- The most important factor in interpreting a put option agreement is what it is aiming to achieve in terms of selling some asset back to selling parties or companies.
- Once the nature of the put option agreement is understood, it may become possible to apply the concept to a dividing up assets in a divorce or negotiating a prenuptial agreement.
- When family law clients first come in to discuss their issues with an attorney, it is important to ensure they ask their lawyer detailed questions about any put option agreements and the implications they may have.
- It may help to think through the use of put option agreements and financial issues for one or both parties to a divorce or other family law action, and see how better those contracts could be structured to make certain matters more palatable.
- Options are not limited to the way that put option agreements are currently perceived and constructed. It may also be possible to work with a knowledgeable attorney and find solutions that better represent the interests of clients.
- In certain cases, the put option agreement may mean that some of the parties’ value may be “vapor” – something that cannot be subdivided, transferred or sold, and that is essentially great in theoretical value but without any practical value.
- But if one party recognizes certain key financial elements such as a put option agreement and ensures that the settlement mechanisms they negotiate take these financial elements into account, they may end up being well ahead of the other party, who may not recognize the implications of these instruments.
- Knowledge is power. Staying ahead of an opponent with respect to key contact information and financial mechanisms is tantamount to winning a competition, and these family law matters can be viewed as competitions.
- Put options and other contractual arrangements may be formalized in a number of ways. Just because a person sees a reference to put options in some agreement does not mean that the put option has been correctly executed or that the agreement itself is binding.
- Diligent investigation of financial matters during a family law proceeding such as a divorce can pay off handsomely for those who engage a skilled family law attorney.
