Going through a property settlement can sometimes feel like a long, enduring struggle through the Amazon jungle. There are obstacles, moments that will test you, and moments that will encourage you. There is also the moment when it all comes to a triumphant end… where you emerge from it all to see the light at the end of the tunnel (or the jungle in this analogy).
Recently, news has emerged of the separation of Amazon CEO Jeff Bezos and wife, MacKenzie. Reports are suggesting that Jeff and MacKenzie have reached an amicable agreement with respect to property settlement. What that agreement is exactly remains unknown. One can only guess and take comfort that both parties are going to be just fine considering that just 3 months ago Jeff was worth a whopping $228.87 billion. In light of this, situations like the Bezos separation open the door to a number of questions with respect to pre-nuptial agreements – the who, the why (or why not in this case), and the what… What happens when there is a pre-nuptial agreement and what happens when there isn’t one?
In a family law context, a pre-nup is an agreement that couples can enter before marriage, which determines how the property will be divided in the event of a separation.
Some consider a pre-nup as a way to ‘protect’ themselves and their assets. Pre-nups can, however, be extremely controversial and have emerged as a highly contentious issue in family law. They also raise the question of how exactly do you raise such an issue with your betrothed.
Considering the Bezos’ situation, it has been suggested that there was no pre-nup. People around the world are likely to be questioning why, particularly given the extremely significant value of the current property pool. The thing is, when Jeff and Mackenzie met, the value of their property pool was somewhat minimal as far as all media reports suggest anyhow. Amazon was not yet established and in fact wasn’t until 1994, a year after the parties married. So put simply, there was no $228.87 billion to protect.
Turn the tables for a moment… Say, for example, Amazon was established in 1990 and was thriving prior to the parties’ marriage in 1993. This would absolutely be a situation that would warrant the consideration of a pre-nup in order to provide a level of protection to Jeff in the event of a separation.
Turning to the situation that we have before us now, where we consider the division of a monumental property pool in the absence of a pre-nup.
Articles have emerged that confirm the parties have reached an amicable ‘post-nup agreement’. It is understood that Jeff will retain Amazon and there will be no disruption to the corporate structure or control of the company. Rather than Mackenzie receiving a portion of control over the company, it is likely that she will receive an ongoing allowance or annuity, based on Amazon’s performance.
In a family law context, there are two aspects to the agreement that has allegedly been reached:
- Division of property – whilst the remainder of the agreement is unknown, it has been suggested that Jeff will retain his interest in Amazon as part of his property settlement; and
- Spousal maintenance – as noted above, rather than dividing the company, Mackenzie will receive an ongoing payment from Jeff, the amount of which will depend upon the performance of the company, noting that this will directly affect Jeff’s income.
In Australian family law, such an agreement can be formalised with a Binding Financial Agreement, formally referred to as a Section 90C Agreement or by way of consent orders, which are filed with the court.
If you require assistance with a pre-nup or a post-nup, or require advice following a divorce & separation, our team of family law specialists in Toowoomba are available to assist with any questions or queries you may have.