Bill and Melinda Gates, one of the world’s richest couples, have announced that they are filing for divorce and court documents have revealed that there is no prenup.
Bill, 65, and Melinda, 56, have been married for 27 years and, as well as raising three children together, have amassed a combined net worth of $130 billion. It has been revealed that the couple did not sign a pre-nuptial agreement when they wed in 1994 resulting in the need to divide up their estate, which includes, multiple properties, a private jet, an art collection and several luxury cars.
The high-profile couple’s divorce has led to many couples asking themselves ‘what happens if my marriage breaks down?’
What is a pre-nuptial agreement?
A ‘prenup’ or premarital agreement is a written agreement made by a couple who plan to get married, or enter into a civil partnership, which states the financial settlement that would be made in the event of a divorce, or the civil partnership is dissolved. It is effectively an agreement stating, “who gets what”. It is signed by both parties before the marriage takes place.
There are a number of different things to consider when drawing up a pre-nuptial agreement including, but not limited to:
- The family home – how will this be divided?
- Money – this includes any money held by individual or both parties, including savings and investments.
- Debts – if one party builds up debts, the agreement can limit the liability of the other party.
- Children – this can include children from a previous marriage and whether they have the right to any property or assets.
- Property – this includes property that either party brought into the relationship.
- Inheritance/Trust – property and assets inherited during the marriage or gained from a trust.
What is a post-nuptial agreement?
A ‘postnup’ is a written agreement made by a couple after they have got married or entered into a civil partnership, which states the financial settlement that would be made in the event that they divorce, or the civil partnership is dissolved. Successive post-nuptial agreements can be made during the marriage or civil partnership to reflect changes in circumstances such as a new child or significant pay rise.
If you are in doubt about whether you need to review your pre-nuptial or post-nuptial agreement, we recommend you seek a solicitor’s advice.
Why have a pre-nuptial agreement?
An increasing number of couples are choosing to enter into pre-nuptial agreements and these are particularly common when one party has substantial wealth which they wish to protect in the event of a relationship breaking down. However, a pre-nuptial agreement is not just for the wealthy, often couples simply want to clarify what would happen if they were to divorce and feel a pre-nuptial agreement is likely to minimise any disagreement if they were to separate.
What happens if I do not have a pre-nuptial agreement?
When you marry or enter into a civil partnership, your assets become ‘matrimonial assets’ and can be divided between you and your partner within divorce proceedings.
Although the court has power to make an order for Financial Remedy, a properly drafted pre nup is highly influential in those proceedings and certainly allows the couple to influence the likely end result and avoid costly litigation.
How long does a pre-nuptial agreement last?
A pre-nuptial agreement is a contract and so the length of the agreement can be included in its terms. Some couples choose to state a date after which the agreement will no longer be valid, for example, a couple may agree that it is valid for the first 10 years of marriage.
Do you need legal advice for a pre-nuptial agreement?
Yes, both parties must seek independent legal advice on the agreement to ensure it is fair and lawful. Creating the agreement can be complicated and require a lot of in-depth discussion on issues the parties may disagree on. Mediation is a great way to begin the process and ensure a level playing field.
If you would like to discuss any points in this article further or are looking for independent advice when creating a pre-nuptial agreement, please contact Spire Solicitors LLP on 01603 677077.