The Multibillion-Dollar Gates Divorce, and No Prenup
Bill and Melinda Gates decided to call it quits after 27 years of marriage. As it turns out, they didn’t sign a prenuptial agreement 27 years ago. Was this a massive blunder that could cost Bill Gates half of his fortune? Bill and Melinda have reportedly already signed a separation agreement dividing up their assets, though the terms of the agreement have not been disclosed to the public.
What is a prenuptial agreement? And how could it have helped Bill? A prenuptial agreement, or prenup, is a contact that two parties enter into before their marriage that outlines the ownership and division of their assets should their marriage breakdown. At the time of their marriage in 1994, Bill Gates’s fortune was worth approximately $9.35 billion. Today, his net worth is approximately $130.4 billion. If Bill had a prenup at the time of his marriage, he could have protected all of his earnings from Microsoft, and his real estate, from being divided at the time of divorce. No one enters a marriage thinking it is someday going to end, but with a prenup, you prepare for the worst and hope for the best.
Do only wealthy people need prenups? No. A prenup allows you to protect from division earnings and property you may not even have at the time of marriage. In Maryland, marital property is anything acquired by the parties during the marriage, regardless of title. Marital property is subject to equitable division. A prenup allows parties to designate how property will become marital property. For example, prenups often specify that property can only become marital property (and thus, subject to division) if the parties choose to title it jointly during their marriage. Anything not titled jointly, can remain one party’s sole and separate property. A prenup allows parties to protect their business and any earnings that result from that business by constituting it as non-marital property. Parties are even able to designate the terms of future spousal support, or alimony, if any at all.
The purpose of a prenup is to have parties enter into a marriage with full discussion and transparency as to their current finances, and how their finances will be handled throughout their marriage. If you are considering getting a prenup before you get married, or even want more information to find out if it’s right for you, contact our office today to speak to an experienced attorney about the best way to protect yourself.