Money Can’t Buy Love – The Inextricable Relationship Between Marriage and Money
From what we see of recent celebrity breakups, they seem to always prove the old adage that money can’t buy love. And that seems to be true for some couples who have split over the past year. If anything, it definitely points to the potential advantages of prenuptial agreements.
A high-profile couple that has found themselves in the media spotlight recently is John Paulson and his soon-to-be ex-wife, Jenny Zaharia. Paulson, a billionaire hedge fund manager who famously shorted the market before the 2008 housing crash, has been spending time with a 33-year-old Instagram nutritionist, purchasing a Palm Beach mansion right before he filed for divorce. In the meantime, it is presumed that his divorce from his wife of 21 years will potentially cost him billions of dollars since the couple did not have a prenuptial agreement.
For fans of Adele, her Las Vegas show cancellation put her woes firmly in their lap (and wallets) when she canceled 24 hours before her opening. Many of those fans were already in Vegas with tickets in hand. Citing COVID and supply constraints, rendering her unable to pull off her show opening, others have postulated that it may have had more to do with boyfriend problems than supply constraints. While she has put great effort into squashing those rumors, many may wonder if her very recent (very expensive) divorce has made her a little relationship-anxious.
Over the past couple of years, we saw other high-profile breakups, with the divorce of Bill and Melinda Gates and Jeff Bezos and Mackenzie Scott. While the men came away with new girlfriends, the ex-wives came away with significant financial wealth. Both parties did not have prenuptial agreements. Adele and her husband, who divorced last year, also did not have a prenuptial agreement.
Why Have a Prenuptial Agreement?
A prenuptial agreement is a legally binding contract that sets out the financial terms of a marriage and how assets and debts will be divided should the marriage end. For many high net worth individuals, prenuptial agreements go hand in hand with wedding vows. Coming into a marriage with significant wealth, it makes sense to protect it in case of divorce or death.
Without a prenuptial agreement, state laws determine how assets are divided if a couple can’t negotiate a property settlement. Depending on the state where the couple resides and divorces, state laws either recognize community property distribution laws or equitable property distribution laws.
In Washington state, where both Bezos and Gates were divorced, and California, where Adele filed for divorce, community property division is state law. Unless otherwise agreed upon, under community property laws all marital property acquired during the marriage is divided equally. In New York, where Paulson filed for divorce, there are equitable distribution laws. Under equitable distribution, marital property is not always equal but divided in a way that the courts deem more equitable considering many factors about the couple’s life and relationship.
Even for couples who aren’t exactly high net worth, prenuptial agreements can be very beneficial for partners coming into marriage with their own assets, debt, and children from former relationships. Having a valid prenuptial agreement in place can make matters easier and less contentious if a couple decides to divorce or if one partner dies.
While these celebrity couples did benefit from a prenuptial agreement, it may make sense for you. The New York family law attorneys at the Kron Law Firm would be happy to discuss the benefits and disadvantages of having a prenuptial agreement. Contact us online or call us at (212) 671-0936 to schedule a consultation.