Recently, Jeff Bezos and his wife, MacKenzie, announced via Twitter that they were going to divorce. Jeff Bezos is the founder of Amazon and is thought to be worth approximately $136 billion, making him one of the wealthiest men in the world. The public was soon shocked to learn that they did not have a prenuptial agreement. What does this mean for the Bezos’ divorce? Is it possible that MacKenzie could be left with nothing?
That scenario is not likely. Due to the fact that the Bezos’ live in Washington, a community property state, both spouses are probably going to receive 50 percent of all assets accumulated during the marriage. The news has also left many wondering how this division of property would work if the couple lived in Illinois. The question is a good one, as Illinois operates under very different rules.
Community Property States
Currently, only nine states in the country are community property states: Louisiana, Arizona, California, Texas, Idaho, Nevada, New Mexico, Wisconsin, and of course, Washington. In these states, any income, property, or other assets acquired during a marriage are considered community property. Upon divorce, each spouse will then receive 50 percent of those assets, in most cases. This means that even without a prenuptial agreement, MacKenzie and Jeff Bezos will likely each receive half of the income earned from Amazon during their marriage, in addition to half of the many real estate properties they own and any other financial assets....
Marriage naturally intertwines a couple’s social and financial lives, and these matters must be untangled in the event of divorce. This is no easy task, especially in light of equitable property division, a legal model that ensures both spouses receive a fair share of marital property following divorce. Under this standard, spouses can expect to divide marital assets in roughly equal measures, regardless of which spouse provided the resources to acquire the property in the first place.
While the contributions of both spouses need to be recognized in a divorce, a spouse who has substantial assets coming into a marriage or the potential to become a high-earner may have reasonable concerns about protecting his or her interests if the marriage does not work out. In these cases, a couple may choose to use a prenuptial agreement to address the resolution of financial issues in the event of divorce or another designated event, such as the death of a spouse.
Planning for the possible end of a marriage before it has even begun may appear pessimistic, but a prenuptial agreement serves an important purpose, and it can make the divorce process faster and simpler by sorting out complicated issues in advance. Importantly, this need is not limited to couples in a particular stage of life at the time of their marriage, as both younger and older couples can benefit from prenuptial contracts....
Outside of the emotional benefits that most people connect with marriage, being married also offers financial advantages for central issues, such as health insurance and tax liability. However, these advantages can turn into detriments if a marriage ends in divorce. Without a prenuptial agreement, parties are expected to divide their assets in roughly equal proportions.
While predicting financial success at the outset of marriage is nearly impossible, couples expecting productive careers and those with substantial assets at the beginning of the marriage often consider premarital agreements to iron out the division of assets and maintenance (spousal support) in case divorce does occur.
The underlying assumption is that both parties enter into these agreements freely and with sufficient information to make an informed decision about the fairness of the arrangement. The reality, of course, is not always so simple, and circumstances may motivate a spouse to challenge the validity of such an agreement when divorce enters the picture....
In the days leading up to engagement and marriage, thinking about the negative possibility of divorce is not a topic most couples want to contemplate. Visions of growing old and all the things they hope to accomplish together usually overtake any concerns about the relationship not lasting.
While expecting a marriage to last a lifetime is the reasonable way to approach a new relationship, no one knows the future. Hammering out how to handle property division and payment of support in the event of divorce through the use of a prenuptial agreement may not be romantic or optimistic, but sometimes pragmatism is more important in the long-term. These conversations are especially important if a couple is older and/or is bringing a lot of assets and other financial resources into the marriage.
Figuring out these issues before divorce is on the table will make the process of dissolving the marriage easier by reducing the likelihood of disputes and the time needed to negotiate a settlement. The terms of these agreements must be memorialized in writing and executed prior to marriage. Further, Illinois regulates the formation and types of provisions these agreements can legally contain....
The fact that roughly 50 percent of all first-time marriages end in divorce is common knowledge. However, you may be surprised to learn that 67 percent of second marriages (and 73 percent of third) do not make it “’til death do us part” either. There are no firm reasons why, but one aspect is clear — if you are contemplating taking a second trip down the aisle, you should have an Illinois prenuptial agreement.
Illinois Premarital Agreements
A premarital agreement, more commonly known as a prenuptial agreement (or pre-nup for short), is a voluntary agreement entered in to by both parties prior to marriage that becomes valid once the couple is married....
This June, Illinois same-sex couples will be able to marry pursuant to a bill passed by the Illinois General Assembly in November. While this public act treats all couples the same for the purposes of state law, married same-sex couples still have unique legal issues to consider.
When a same-sex marriage ends, obtaining divorces may prove problematic for Illinois couples who leave the state after their marriages end. Today, at least 16 other states, the District of Columbia and the federal government will recognize same-sex marriage from Illinois. However, if a couple married in Illinois moves to a state that doesn’t recognize same-sex marriage, they may be unable to divorce. These couples may have to establish residency in a state that recognizes gay marriage in order to divorce.
Premarital agreements have a bad reputation. People associate premarital agreements with a lack of commitment or as only appropriate for the very wealthy. But in reality, premarital agreements can provide stability and security to any marriage – regardless of financial situation. While Illinois’ divorce rate is somewhat lower than the national average, divorce is still common. If you live in Illinois and are contemplating marriage, consider whether a premarital agreement might be right for you.
A premarital agreement – also known as a prenuptial agreement or a “pre-nup” – is a written agreement between two prospective spouses in contemplation of marriage. Once signed by both parties, it becomes effective upon marriage....