Lessons can be learned from Amazon CEO’s high-asset divorce

People in Connecticut may have heard by now that Amazon CEO Jeff Bezos and his wife are seeking a divorce. This high-asset divorce is notable as Bezos is considered the wealthiest man in the world, with a fortune of approximately $136 billion.

Unlike Connecticut, which is an “equitable distribution” state with regards to property division in a divorce, Bezos and his wife live in a “community property” state. This means that they each have a full ownership interest over assets obtained or money earned while they were married, and thus courts will divide marital assets evenly. Bezos founded Amazon while married, meaning that his wife could stand to walk away from the divorce with a significant ownership interest in the company, making her very wealthy indeed. And, reportedly the couple did not have a prenuptial agreement that could have addressed Bezos’ interest his future assets and earnings.

As this demonstrates, when a person owns a significant amount of assets coming into a marriage or wants to ensure that money earned, and assets obtained while married will remain separate property in the event of a divorce, it can behoove them to execute a prenuptial agreement prior to walking down the aisle. In a prenup, spouses can delineate which assets — both those currently owned as well as projected earnings — will remain the separate property of the spouse who owns them, rather than becoming part of the marital estate.

Of course, to be enforceable a prenup cannot be executed under coercion or duress. In addition, prenups cannot be so one-sided as to be unconscionable. Each party to the prenup must fully disclose all their assets and liabilities, and each spouse should retain an attorney to ensure they understand what the prenup means for their future as well as ensuring the final document is fair.

Prenups can prove to be very valuable to high-asset couples in the even that their marriage not last. A prenup can protect their wealth should they divorce, but it is important that prenups are not rushed into, that there are no hidden assets and that the parties understand what the legal effect of the prenup is before voluntarily signing it. Thus, it is essential that a person retain an attorney when executing a prenup, so that the final document can be enforceable.