There are 2 types of contracts married couples can sign to protect their money - here's what it means if divorcing billionaires Jeff and MacKenzie Bezos never signed one
- Amazon CEO Jeff Bezos and wife MacKenzie Bezos will file for divorce.
- It's unclear whether they ever signed a prenuptial or postnuptial agreement.
- Both agreements cover financial issues and the future of assets in the event of a divorce.
- Jeff Bezos is the richest person in the world, with an estimated net worth of $137 billion, but he didn't found Amazon and earn most of his money until after marrying.
Jeff Bezos, the founder and CEO of Amazon and the wealthiest person in the world, announced Wednesday that he and his wife, MacKenzie Bezos, will file for divorce.
The couple have been married 25 years and have four children together.Bloomberg estimates Bezos is worth $137 billion and Amazon has reached a $792 billion market cap.
At this point, it's unclear how Jeff and MacKenzie, a novelist, will divide their assets upon divorce. It's also unclear whether they ever signed a prenuptial agreement. Jeff founded Amazon after he and MacKenzie married (they met when they were both working at investment-management firm D.E. Shaw in New York) and MacKenzie was one of Amazon's earliest employees. It's also possible that they signed a postnuptial agreement after Amazon took off.
So what's the difference between a prenuptial agreement (commonly known as a "prenup") and a postnuptial agreement ("postnup")?
Some couples sign a postnup years after getting married, when they realize there are issues that could threaten their relationship
A prenup is a legally binding contract two people sign before marrying that covers financial issues and the future of assets in the event of a divorce, Kelly Frawley, partner in the Matrimonial and Family Law Department at Kasowitz Benson Torres LLP, told Business Insider's Hillary Hoffower. Hoffower reported that prenups were once stigmatized, though they're quickly regaining favor among millennial couples.
A postnup is similar to a prenup, but takes place after a couple have married. As Heather L. Locus, head of the divorce practice group at Balasa Dinverno Foltz, writes for Forbes, "a postnup is an effective way to document intentions for earnings and assets during the marriage as well as in the event of a future divorce."Couples typically sign a postnup either when they didn't have time to sign a prenup before the wedding or when they are "aware of issues that threaten their relationship and want to gain clarity on areas of conflict," Locus writes.
If Jeff and MacKenzie did sign a prenup when they were living in New York, it might have covered issues like defining separate and marital property. According to the New York City Bar legal referral service, that's the difference between property that will belong to just one person in the event of a divorce or property that will belong to both partners.
If, however, the couple signed a postnup when they were living in Seattle, it might have defined property rights for assets they acquired after marriage (like earnings from Amazon). Washington is a community property state, meaning that all assets and debts the couple acquires during marriage are the property of both spouses. As Business Insider's Tanza Loudenback reported, when a couple splits, they're each entitled to half of the assets.
In a statement on Twitter, in which he announced the impending divorce, Jeff wrote that he and MacKenzie "see wonderful futures ahead, as parents, friends, partners and ventures and projects, and as individuals pursuing ventures and adventures."