The Amazon divorce and the impact of Pre-nuptial Agreements
Imogen Powell is a Solicitor with Ian Walker Family Law and Mediation Solicitors which is a leading Family Law Solicitors Practice in the South West, with offices in Exeter, Taunton, Honiton and Weston-Super-Mare and consulting rooms in Yeovil and Bridgwater. Here Imogen discusses the importance of pre-nuptial agreements in appropriate cases.
The Amazon divorce
The world’s richest couple, Jeff and McKenzie Bezos, have recently made public the details of their divorce and financial settlement.
The details of their split and consequent financial settlement have been the subject of speculation for the media, public and lawyers for months since it was announced that the couple would be divorcing earlier this year, particularly as the parties did not enter into a pre-nuptial agreement.
For those not in the know, Jeff Bezos is the founder and chief executive officer of Amazon, the online retail giant established in 1994, a year after the parties were married. Until the divorce and subsequent financial settlement, Jeff and McKenzie were the richest couple in the world, with Jeff’s estimated net worth totalling approximately $137 billion.
The divorce settlement
The parties have now revealed on Twitter that they have reached agreement in relation to their finances. As well as 75% of her stock in Amazon and the voting rights in her shares, McKenzie has relinquished all of her interest in the Washington Post and Blue Origin to Jeff.
Although the divorce was dealt with in America, in England and Wales the starting point for long marriages would usually be a 50:50 split.
The court will however look at a wide range of factors when determining the financial division under section 25 if the Matrimonial Causes Act 1925, such as the financial resources of the parties, their financial needs and obligations, the standard of living enjoyed before the breakdown of the marriage, the age of the parties and the duration of the marriage, any physical or mental disabilities of either party, contributions made towards the family, the conduct of each of the parties and any benefits each party will lose the chance of acquiring. Thus, after taking all of these factors into account, the resulting division of the parties’ finances may not necessarily result in a 50:50 split. In the case of Jeff and McKenzie Bezos, the overall split was far from 50:50, although specific details of their settlement or their negotiations have not been published. However, McKenzie will still retain a 4% state in Amazon, worth at least $35 billion.
Why a prenuptial agreement?
For those non-celebrities without billions in the bank, a pre-nuptial agreement may still be worth considering, particularly if they are concerned about how their finances will be dealt with on separation, they have children from before their marriage whose interests they wish to protect, or if they wish to preserve certain assets or to avoid potential dispute in the future.
Pre-nuptial agreements stipulate how the parties hold their assets and how these will be divided on the event of a separation. Where the document has been drafted correctly, the parties have taken independent legal advice, there was full financial disclosure, there was no fraud, misrepresentation or undue pressure and the terms of the agreement are ‘fair’, then a court will usually seek to uphold the agreement, although it is impossible to complete oust the jurisdiction of the court and make a completely legally binding document that the court must follow. However, they can and do often help to alleviate animosity and protracted court room battles in the event of divorce. The parties know where they stand right from the beginning of the relationship and certain assets can be preserved and protected from claims by the other party in the event of a relationship breakdown.
Circumstances can change however and so it is important to review the agreement regularly and/or on the emergence of certain events such as the birth of a child.
If you require any advice or assistance in relation to pre-nuptial agreements, financial settlement or divorce then do not hesitate to get in touch with one of our experience team who will be pleased to assist you