Prenuptial agreement

When Is It Too Late to Sign a Prenup?

In 1993, Jeff Bezos married MacKenzie Tuttle. While he already had a successful career at hedge fund D.E. Shaw & Co., this was about a year before Bezos would launch a little online bookstore out of his Seattle garage. Amazon is now a trillion-dollar company, Bezos' net worth is estimated around $150 billion, and he and MacKenzie just announced they are divorcing.

The news of the divorce shouldn't affect Amazon's bottom line, even if splitting in 2019 will cost Bezos a few more tax dollars than it would've in 2018. He might also be wondering just how much of his personal net worth or stake in the company he founded will take a hit in the divorce, and if it might not be too late to sign a prenup.

The Contract Before the Storm

It is right there in the title: prenuptial agreement, meaning before the nuptials. So, by a very strict definition, once you're married, it's too late to sign a prenup. But what happens without one?

The couple still reside near Seattle, and Washington's marital property laws recognize the concept of "community property," under which almost all property acquired by either spouse during a marriage is presumed to be jointly owned, and therefore split equally upon divorce. Marital property generally can include:

  • Earnings of either spouse during the marriage (including interest on investments, capital gains, retirement benefits, and other assets);
  • Property obtained with earnings during the course of the marriage; and
  • Property obtained with community funds.

Presumably, that would include Bezos' stake in Amazon, and just about everything purchased with income derived from his role running the company. Additionally, Reuters reports that Jeff has credited MacKenzie for her support during Amazon's launch and that she did accounting for the company for its first year after it was founded in 1994. And while MacKenzie doesn't appear to own any shares of Amazon stock independently, she may be entitled to half of Jeff's 16.1 percent stake in the company, worth an estimated $130 billion.

A valid prenup might've limited MacKenzie's access to those assets.

Cleaning Up After the Fact

To be fair, a 50/50 split would be dependent on no existing prenup, and no postnup either. While more rare than prenups, a postnuptial agreement regarding marital property can settle stressful issues regarding money, assets, and debts, and are becoming increasingly common. It's entirely possible Jeff and MacKenzie came up with some such agreement between 1993 and now.

Also, Washington's community property laws would only come into play if the couple don't come to their own marital property settlement agreement during the divorce. "These two have been separated for a not insignificant time" New York attorney Bernard Clair told Reuters, "and I would assume ... they would have used the time to reach a private, confidential agreement."

While it might be too late to sign a prenup after you say, "I do," it's never too late to sort out marital property issues, even if you're still married. And it might save you from parting with a substantial chunk of change in a divorce. Talk to an experienced family law attorney for help.

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