How a postnup could help Jeff Bezos divide his $137 billion fortune
[Source: MarketWatch]
Celebrity Divorce Lawyer Christopher C. Melcher explains how a postnup could help Jeff Bezos divide his $137 billion fortune
No prenup, like Jeff Bezos and ‘Dirty John’s’ Debra Newell? Here’s how a postnuptial agreement can still protect your assets.
Cover your assets.
Amazon head Jeff Bezos and his soon-to-be ex-wife MacKenzie reportedly don’t have a prenuptial agreement, according to TMZ — so that leaves their staggering $137 billion fortune on the line. The couple of 25 years will file for divorce in Washington state — which is a “community property state” — where couples divorcing without a prenup split assets equally, TMZ reported.
Even though Bezos posted on Twitter that the separation is amicable, a postnuptial agreement could make dividing their assets much easier, especially since the Bezos family owns five homes. Unlike a prenup, which a couple signs before their wedding date, a postnup is a voluntary legal agreement that couples sign after they are married to settle financial issues such as whether or not one spouse will support the other financially, and how they’ll divide their property or marital debt in case they decide to divorce. A postnup has no deadline, and can be signed at any point in the marriage.
Attorneys told Moneyish that postnup inquiries are common after big life events, such as: when one partner’s parents give a cash gift or pass down a family business, and they want to make sure the assets only go to their child; when there’s a death in the family, and one of the spouses is inheriting more money; or when infidelity occurs.
It’s also a way to get on the same financial page when the couple comes through a rough patch.
Just ask Debra Newell — the successful Orange County business woman whose real-life story about marrying con man John Meehan features on the hit true crime podcast turned Bravo series “Dirty John.”
Newell (portrayed by Connie Britton on the Bravo scripted show) met Meehan (played by Eric Bana) online in 2014, and he appeared to be a charming and successful anesthesiologist when they dated in person. Newell, 63, tied the knot with him in Las Vegas months later without signing a prenup — and found out shortly after that he not only lied about being a doctor, but he also had a violent history of drug abuse and deceiving wealthy women. And her marriage to Meehan ended up costing her $300,000, including the money he stole from her, the cost of private investigators, lawyers and associated legal fees.
“One of the things he said to me was he would destroy me, my business and my family,” Newell told Moneyish at an NYC panel hosted by Bravo and Oxygen on Tuesday. She told him that she wanted a divorce after learning about his criminal past, but she also made some moves to protect her wealth. “Once I realized who John was, I started moving money around; I started changing passwords; I changed some bank accounts,” she said.
Newell also asked a lawyer about getting a postnuptial agreement, but both parties must agree to — and sign — one in order for it to be legit. So in Newell’s case, if “Dirty John” refused, divorce would likely have been a next step.
It’s not surprising that Meehan, who stood to have the most to lose, fired their lawyer as he was drafting a postnup. “He would have only gotten half of what I made the year we were married [in 2014], which was (still) a substantial amount,” Newell said regarding the terms that would have been in their postnup if the two legally got divorced. But at the time of the postnup negotiation, Meehan claimed he was disabled for his bad back, and was seeking $7,000 a month from Newell — plus thousands more in legal fees — once they were living separately, Newell said.
And even though Meehan died in 2016, ending their financial battle, Newell is still out more than a quarter-million dollars for the time she was legally bound to him. Newell says she’ll never marry again, and urges other women to learn from her experience by getting their partner’s financial history upfront. And if they also get married without a prenup, they should get a postnup before things sour. “There’s a lot of things that can really protect you if you do it the right way,” she said.
Some couples have already gotten the message. According to a 2015 survey by the American Academy of Matrimonial Lawyers, half of divorce attorneys cited an increase in postnuptial agreements in recent years.
The top three items most commonly covered included: property division (90%); alimony and spousal maintenance (73%); and retirement accounts (45%).
“Typically, people are getting back together after something bad happened in the marriage. A lot of times it’s going to be an affair, alcohol and drug abuse; (or) it could be gambling or deceit regarding money, and they’re reconciling,” Tonya Graser Smith, a divorce lawyer at GraserSmith LLC in Charlotte, N.C. told Moneyish, adding that what spouses can legally include in their postnup varies by state law. “They didn’t complete the divorce, but both of them say ‘we want to give this another chance.’ They want to get the train back on the track. They want something that sets out the terms of who’s responsible for what, and it gives them a tool to hold each other accountable moving forward.”
Postnups are also common when one partner enters a new business deal with outside partners or investors who don’t want the other spouse involved in any financial decisions, Graser Smith added.
But signing a prenup or postnup doesn’t come cheap, either, and can cost each spouse anywhere from $10,000 to $100,000 in legal fees.
So if a couple skips the prenup because they can’t afford it at first, they can consider a postnup once they come into more money down the line, suggested celebrity divorce lawyer Christopher C. Melcher, a Los Angeles-based divorce attorney who works with high profile celebrities and athletes.
“They [those considering a postnup] have to have enough free cash available to be able to afford that. With a prenup, if they’re planning a wedding, all that money is usually going to the wedding or honeymoon. They don’t have another $10,000 to throw at a prenup unless they’re worth in the millions. You’re talking about people who have more than a million net worth that can afford it,” Melcher said. Bezos certainly fits the bill.
Others, like Ayesha Vardag, 51, a divorce lawyer from the U.K., said she wouldn’t get married unless her partner signed a prenup and postnup. She signed the former before her wedding to her husband of nearly five years in 2014, and then the couple amicably agreed to sign a postnup the day of their wedding, just before cutting the cake. “We wanted both just in case the law changed in the future,” Vardag told Moneyish.
The duo both have children from previous marriages, plus property and their businesses built from scratch, so they both wanted to get their assets together. “We’d always wanted a marriage contract so that we’d agree between us how our finances would be determined in the event that we split, to keep us out of the courts and be able to resolve things simply and quickly,” Vardag said, adding that they were able to come to fair terms they both agreed upon.
“Both our individual assets were screened out of any marital redistribution, so that we were able to make arrangements between us, without it being anyone else’s business, on what we owned jointly and what we gave to each other,” she said.
Women especially have all the more reason to look into prenups and postnups as they become more financially independent. In 2017, 57% of working-age women 16 and older were either employed or looking for work. That’s higher than it was in 1980 (51%) . And with the divorce rate up to 50% for married couples in the U.S., according to the American Psychological Association, the notion of “what’s mine is yours” could get ugly.
Despite how much you think you can trust your partner, Newell says if they’re not willing to comply, it’s a red flag that you should get married: “If they love you, they shouldn’t have a problem with it; and if they do, then maybe they’re not the right person for you.”
By Jeanette Settembre
Published: Jan 10, 2019 9:00 a.m. ET
