Amazon's billionaire CEO Jeff Bezos and his wife recently announced their divorce and it may be very costly. Their state of residence is Washington which, like Louisiana, is a community property state where the couple equally splits any assets earned during their marriage. Because he did not have a prenuptial agreement, property division may cost Bezos half of his $136 billion fortune.
In community property states, any money earned by either spouse during their marriage and all property bought with that money is community property that is owned equally by both spouses. Bezos got married before he founded Amazon and earned the resulting fortune. It is unclear whether the couple had a postnuptial agreement.
A prenuptial agreement, known as a matrimonial agreement in Louisiana, is being used with more frequency. Younger couples are interested in separating future earnings and assets. Or, a spouse may want to safeguard a family business or the potential income from a potential business venture. A prenup may also set forth support arrangements, especially for a couple when a spouse gave up a career to care for the couple's children.
To help assure enforceability, there are several things that should be done. Being fair and reasonable, providing adequate support and fairly allocate assets is an incentive for spouses to accept the agreement and refrain from challenging it in court. Transparency and full disclosure of assets and debt may also prevent legal challenges.
Some terms, however, may not withstand legal challenges. Agreements on how a spouse will conduct themselves in their marriage or the number of children they have, for example, will not be enforced. Child custody and support terms are usually unenforceable.
These agreements should set forth how the growth of non-marital assets will be treated. For example, there are cases in which a spouse owns stock in their business before marriage and will continue to own it, but any appreciation may be marital property. Some documents, such as a waiver of interest in a qualified retirement account, may also need to be executed after marriage.