After 27 years of marriage, Bill and Melinda Gates are getting divorced. And while that news is massive in its own right, we’re more concerned with the legal aftermath of the mess because this couple, one of the wealthiest in the world, does not have a prenuptial agreement in place.
The settlement and potential legal consequences of this divorce should be an example of why it’s so important to take marriage seriously and understand its legal aspects. While it’s not romantic to think of your marriage as a legally binding contract, it’s critical to realize that that’s exactly what it is at the end of the day. The consequences of not having the right legal documents in place should something go wrong can be financially and mentally devastating.
To understand the difference in each document, let’s start with the most common: A prenuptial agreement.
What is a prenuptial agreement?
Prenuptial agreements are definitely not solely for the wealthy – but can especially help those who own their own businesses and /or have high assets like Bill Gates does.
When you sign a prenuptial agreement with your partner, you ensure that your premarital assets remain in your name if you get divorced. In simpler terms, you essentially agree to take what’s yours and your partner takes what’s theirs (your own income and their own income and assets), should you ever get a divorce later down the road.
There are numerous benefits to having a prenup in place before you say “I do,”, such as:
- They can help you avoid a messy divorce.
- They can address debt.
- They can ensure your kids receive the assets you put aside for them.
- They keep family heirlooms in the family.
- They ensure you receive your inheritance.
Instead of having a prenup in place, Bill and Melinda had a separation contract. What’s the difference?
What is a postnuptial agreement?
In many ways, a postnuptial agreement is identical to a prenuptial agreement, with the big difference being that a postnup is signed after the couple is already married.
Postnuptial agreements have becoming more and more common over the years for couples who either ran out of time to get a prenup before they got hitched, or perhaps gained a large asset they want to protect it. Couples can get a postnuptial agreement at any time in their marriage.
What is a separation contract?
This is the document Bill and Melinda Gates have put in place instead of a prenup or postnup.
A separation document essentially lists out what assets each individual will take, the roles with child support and custody, and each person’s obligations and rights. It does not involve the court.
A separation document doesn’t always mean the couple is getting divorced, many use it to define separation, live separately and divide up their finances. For Bill and Melinda Gates, however, unfortunately they have already asked the court to end the marriage.
It’s important to have an exit plan.
Whatever you think is best for your marriage and assets, it’s critical to talk about it with your spouse or fiancé and discuss what you would do in the case of a divorce.
While it’s not the most fun thing imagining divorcing your soon-to-be or current spouse, you will endlessly thank yourself down the road if things ever go awry.
Divorces are messy, but they can be a lot cleaner with the right legal tools in place. Contact your LegalShield provider attorney if you have questions or need help deciding which document to utilize.