Bill and Melinda Gates announced their divorce on Twitter just one month ago. Despite being one of the wealthiest couples in the world, Bill and Melinda do not have a pre-nuptial agreement in place. A prenup is a private agreement between a couple that outlines how they will divide their assets in the case of divorce or death.
Typically, wealthier couples sign a prenup for financial security and protection. After 27 years of marriage, three children and a multi-billion-dollar corporation, Bill and Melinda are dividing their assets and lives. It doesn’t take a genius to conclude that this divorce will be expensive, complex and potentially, a little heated.
When it comes to the everyday couple, prenups are a little more controversial. The first line of opposition is usually “but why get married if you’re planning for divorce?” While the romantics have a point, prenups can be a way to protect yourself and your assets in case things turn sour.
Melinda Bates may become the second-richest woman in the world with 73 billion dollars after the divorce. Not a bad outcome, some might say…
Bill and Melinda Gates met when she first joined Bill’s hugely successful firm, Microsoft. You might have heard of it. They dedicate a large portion of their $124billion fortune to an organisation fighting infectious disease in young children.
Elizabeth Jacques, an Associate Solicitor at the family law firm, Goodman Ray, said many couples marry into a partnership and agree to share everything with one another. One partner may have more wealth, and the other may bring something different that’s equally as valuable.
It’s no secret that money is a complex topic to discuss with family, friends and your partner. It can be challenging for couples to navigate a discussion on prenups – never mind actually executing and signing a contract.
Jacques added: “The cost of a prenup is normally far less than the cost of contested divorce proceedings. If circumstances change throughout the marriage and, for example, the couple have children, it may be that the prenup is not upheld in any event if it becomes unfair.”
Over the past few years, there has been a little controversy over whether prenups even hold up in court.
Jacques said: “There are certain guidelines the court will follow if a party is wanting to rely on a prenup agreement, including whether the agreement was fair, if both parties obtained sufficient legal advice and if full disclosure was given at the time from both parties.”
If you enter a prenup, you should expect the court to uphold the agreement in the case of a divorce. Of course, for the everyday couple with an average income – this all seems like a lot of hassle. Between the initial prenup conversation and worries of whether it will even hold in court – what’s the point?
Jacques advised couples to consider how their wealth and assets may grow throughout their marriage. You might not have substantial assets now – but in ten or twenty years, you could have a lot more to lose.
Prenups come with many challenges – both for wealthier couples and those of us with a minimum income. Individuals can feel pressured into a prenup, others may sign it just so they can start planning the wedding, and some couples reject the idea altogether.
Jacques continued: “It is extremely important that couples know the implications of entering into one, especially if one party has a lot of valuable assets in their name and signing an agreement preventing them any access to this upon divorce can prove extremely detrimental.”
As Bill and Melinda navigate the division of their fortune and marriage, consider whether a prenup is appropriate in your relationships. Your future self might just thank you for it.
Always seek legal advice before signing the contract and make the best decision for you.
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