Headlines stating “The Richest Person on the Planet Files for Divorce” undoubtedly trigger thoughts about prenuptial and postnuptial agreements.
With an estimated net worth of $137 billion (yes- that’s BILLION!), Jeff Bezos and his wife, MacKenzie, announced their divorce a couple weeks ago.
Jeff Bezos, the chairman, chief executive, and largest shareholder of Amazon, founded the company and earned most of his wealth after the two were married. The Bezoses retain a 16% stake in the company.
They have been married for 25 years and have four children together.
They own five houses across the US, in Medina, Washington; Beverly Hills, California; Van Horn, Texas; Washington, DC; and Manhattan, New York; making the Bezos family the 28th largest landowner in the United States.
They do not have a prenuptial or postnuptial agreement.
Wait, what? Why?!
And the next question, what happens now?
Of course it is mere speculation at this point, but it’s likely that MacKenzie Bezos will end up with a substantial stake in the company.
Will she sell her portion or seek a seat on the company’s board of directors?
Only time will tell…
Prenuptial and postnuptial agreements are legally binding contracts outlining financial issues and distribution of assets in the event of divorce.
A prenuptial agreement is signed before marriage; while a postnuptial agreement is signed after marriage.
Absent a prenuptial or postnuptial agreement, state laws will come into play and determine the distribution of assets in the event of divorce.
The Bezos’s assets will likely be split 50/50 by a judge. Since their home state is Washington, which is a community-property state, all assets and debts acquired during marriage are the property of both spouses.
In Florida, marital property is divided according to what is known as equitable distribution.
Under equitable distribution, marital property is fairly divided between the parties taking into consideration what each party owned before the marriage, contributed to the marriage, the economic circumstances of each party, and duration of the marriage, among other factors.
Just because you sign a prenuptial or postnuptial agreement doesn’t mean you’ll get a divorce – it just means that in the event that you do get one, each party will do so with a clear understanding of what they are taking away from it.
Nor does signing a prenup in any way mean that you do not love or trust your future spouse. The purpose of a prenup is both to protect yourself AND YOUR CHILDREN in the event your relationship turns sour down the road.
And prenuptial agreements can be tailored to not only address divorce but, in our experience, even more importantly, post-death rights of surviving spouses.
After all, you probably don’t want your new spouse to “cut out” your kids from your estate plan, right?
We encourage our clients, especially those who are marrying later in life or remarrying, to consult with us before tying the knot.
Amanda “Prenups Have Their Place” Lynch Elliott
P.S. Prenups are just one issue we explore at your Family Succession Strategy Session. Book yours today now!