Prenups and postnups set out rights to property and responsibilities for a couple in the event of a death or divorce, said Michael Stutman, a founding partner of Stutman Stutman & Lichtenstein in New York. Prenups are agreements made before a marriage; postnups, after. Absent either of those legal documents, state laws come into play that can govern distribution.
“The biggest mistake lawyers make is they try to be too stingy for the wealthy party, or too greedy for the needy party. There’s a sweet spot for the two sides.”
Amazon’s billionaire CEO and his wife, MacKenzie, announced Wednesday via a tweet that they intend to divorce. TMZ reported Thursday that the couple did not have a prenuptial agreement, and it’s unclear whether they had a postnuptial agreement. Experts say the distinction could be costly for the world’s wealthiest man, whose fortune is estimated at $136 billion.
Washington state, where Bezos and his wife reside, is one of a handful of “community property” states where, as legal guide Nolo puts it, “money earned by either spouse during marriage and all property bought with those earnings are considered community property that is owned equally by husband and wife.” Put another way, Bezos — who got married before he founded Amazon — could be half as wealthy after a trip to divorce court.
Reasons for putting a pre ( or ‘ post ‘ ) nuptial in place can vary widely.
Among younger couples, there’s often an interest in keeping future assets and earnings separate, said Joslin Davis, a principal of Allman Spry Davis Leggett & Crumpler in Winston-Salem, North Carolina. One party may want to protect an interest in a family business, or the potential for future income from an entrepreneurial venture. Older couples and those in second marriages often look to prenups to preserve assets they already have, or protect inheritances for children from a prior marriage.
Among other aims, a prenup could also outline support for a spouse who gives up his or her career to care for the couple’s children, or on the flip side, include a provision to waive the right to spousal support if state law allows, she said.
Attorneys say postnups aren’t as common. For starters, spouses are often unwilling to sign one: If state law favors you in a divorce, how likely would you be to sign a document that treats you less favorably?
Even if your spouse is on board, your home state may not be.
“There’s a fair number of states that will not allow postnups,” said John Slowiaczek, a managing partner at Slowiaczek Albers in Omaha, Nebraska — which is one such state. “From a public policy standpoint, they’re deemed to be unenforceable.”
States that look askance at postnups often do so because of that presumed shift in power after you marry. People often want to sign one when their marriage is in stress, he said, and so may give away more or demand more than they might otherwise.
Of course, signing either a prenup or a postnup doesn’t mean you won’t end up in court should you divorce, or that your interests would be protected as intended.
“There are ways to challenge premarital agreements,” said Davis, past president of the American Academy of Matrimonial Lawyers.
Slowiaczek also said ” Think of it this way , if your premarital agreement gives nothing or almost nothing to your spouse, he or she has nothing to lose by challenging that document in court to try to have it set aside. Providing adequate support and a fair split provides incentive to accept the agreement instead of litigating.
MORBNOTE ; I also point out the obvious juxtaposition ; What if your premarital agreement gives ‘ all or a vast majority of ‘ to your spouse … Why the Hell would he or she sign THAT ?!!! …
A prenuptial agreement should lay out how the growth in value of nonmarital assets will be treated. Courts have been taking a closer look at that, he said, and in some cases, have determined that the appreciation in those assets’ value is shared, rather than individual, property.
Slowiaczek gave the hypothetical example of an executive who owns stock in his company. Because of that executive’s good management, the value of the company stock skyrockets. A court might deem that the value of the stock at the time of the marriage belongs to the executive, but its appreciation is marital property because his actions caused it to grow.
“If you don’t have that in your premarital agreement, you’re likely to get your basis back but you’ll lose all your marital appreciation,” he said.
MORBNOTE II ; OH SHIT !!! … This is killing me !!! … The sage-like ‘ courts ‘ , in some cases have ‘ determined ‘ that snookems has had a viable input to how the stock market has performed and , only thru her/his adorable , loving presence in the marriage has the executive been able to make the decisions that allowed the value of company stock to ‘ skyrocket ‘ !!! …
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