The latest news about Jeff Bezos, the founder and CEO of Amazon and Forbes Rich List’s wealthiest person in the world, could have a lot of people re-thinking whether a timely prenuptial agreement may just be a very good idea. Bezos, whose net worth is estimated to be, on last count, around $136.7 billion, announced earlier this month that he and his wife, MacKenzie Bezos, are heading for the divorce courts. And guess what – they don’t have a pre-nup in place. That means some judge is going to have to work out who gets what, and there’s a whole big bunch of lollies on the table.
Pursuant to the laws of the State of Washington, where the parties reside, any money earned by either spouse during the marriage, and all property bought with those earnings, is considered community property that is owned equally by both husband and wife. When Bezos kicked off his e-commerce colossus Amazon he was working out of his garage, so now it’s all on the line, and it now looks like he may just find himself a shade under $70 billion short when he eventually steps out of court. It all could have been very different if he’d had a pre-nuptial agreement in place.
In Australia, pre-nuptial agreements are commonly referred to as ‘Binding Financial Agreements,’ ‘BFA’s’ or, in the colloquial, just plain ‘Prenups’. They are private agreements stipulating in advance how the matrimonial assets and liabilities will be divvied up if the relationship breaks down. These types of agreements can be made before, during or after the relationship – whether it’s a marriage or a de facto relationship. But there are strict requirements circumscribing them, and they can be overturned by the Family Court if they’re not absolutely watertight.
To make a pre-nuptial agreement truly binding, both parties must make full disclosure by providing the whereabouts and true value of all their respective assets, liabilities, superannuation entitlements and financial resources. They must also receive independent legal advice, and the agreement must comply strictly with the legislation. If the agreement is not properly done and the love affair ends in a bust-up, the Family Court is going to take a long, close look at precisely what each of them knew and didn’t know before they signed the agreement. However, provided the parties make full disclosure, receive proper legal advice, and are fully informed of their respective rights and liabilities up front, having a pre-nup can save them a world of stress, pain and drama in ongoing litigation associated legal costs.
Having a pre-nuptial agreement in place doesn’t always mean you won’t end up in Court. Sometimes, disputes over these types of agreements cannot be avoided. But they are a useful tool to protect an interest in a family business, or the potential for future income from an entrepreneurial venture or other enterprise.
Jeff Bezos didn’t have a pre-nup. Maybe he should have. After all, $70 billion is a lot of money, and as things currently stand, he also could lose his majority shareholding at Amazon, not to mention his “richest man in the world” ranking. Lucky for him he’s still got another $70 billion to console him.
Gisele Reid, Family Lawyer and Migration Agent