The Importance of Prenuptial Agreements
Earlier this month, Amazon CEO, Jeff Bezos, and wife MacKenzie, announced their intent to divorce. Bezos is known as the world’s wealthiest man, with an estimated worth of $136 billion. However, Bezos and his wife reportedly did not have a prenuptial agreement, and may not have a postnuptial agreement either. Without these agreements in place, a high-asset divorce like theirs could get complicated as state laws often come into play.
Bezos and his wife reside in Washington, a community property state, where all money and property acquired during the marriage is considered community property and will generally be divided equally between the couple upon divorce. Not having a prenup agreement in place could be a costly mistake for Bezos, whose wealth could be cut in half once the divorce is finalized.
According to a 2016 survey by the American Academy of Matrimonial Lawyers, prenuptial agreements are on the rise, with 62 percent of respondents reporting that they noticed more of their clients were seeking a prenup over the past three years. Both older and younger couples have a need for prenuptial agreements. Younger couples can keep their future assets separate, while older couples can protect what they already have and keep inheritances safe for children from previous marriages. Prenuptial agreements can also include stipulations regarding spousal support to help spouses that have given up their careers to look after the children or to waive the right of spousal support altogether.
Postnuptial agreements, or agreements made after marriage, are also an option, though they are generally less common than prenuptial agreements. Spouses are often unwilling to sign them, and many states do not allow them. However, it may be the best option for some couples who did not sign a prenuptial agreement before their wedding day.