The surprising lack of a prenuptial agreement is one of the many interesting facets of Amazon CEO Jeff Bezos’s impending divorce. Prenups are becoming more common – and not just among the one percent. Here are a few key learnings from this high-profile split.
A prenup is a contract entered into prior to marriage that describes how you and your future spouse agree to divide your property in the event of a divorce. If you don’t have a prenup, your state’s laws will determine how your assets are distributed if you decide to divorce.
Where you live matters
Mr. and Mrs. Bezos live in Washington, which is one of nine “community property” states abiding by the rule that assets acquired during the marriage are owned by both spouses. Wisconsin is one as well; Illinois and Indiana are not. Determining how marital property is divided in your state will help determine if you would benefit from a prenup.
Marital property appreciation
Jeff Bezos started Amazon in his first year of marriage back in 1994. Even though it would have been difficult to predict the company’s growth back then, a prenup can address whether that growth will count as joint marital property.
Reasonable equals enforceable
If the couple had a prenup, speculation would abound about whether MacKenzie Bezos would try to discredit the contract. Prenups drafted with the intent of leaving one party with very little are likely to be challenged by the losing ex-spouse. As the point of the contract is to make a potential breakup easier, strive for equitability – it will pay off in time and litigation fees down the road.
The decision to have a prenup involves thinking through the legal, financial and emotional implications. Kogut & Wilson can help navigate these issues and protect your interests. Schedule a free 30-minute consultation with one of our attorneys to help determine if a prenup is right for you.
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