News broke this week that Bill Gates and his wife Melinda are divorcing after 27 years of marriage. Bill Gates is the co-founder of the Microsoft Corporation, and he and his wife are founders of numerous charitable foundations. A quick check of Wikipedia indicates Bill Gates’ net worth is approximately $145 billion. He and his wife married in 1994, well after he co-founded his huge company. Fox news has reported that, according to TMZ, the two have no prenuptial agreement. So the question is, if someone like Bill Gates doesn’t have a prenuptial agreement, then why would anyone else need a prenuptial agreement?
Prenuptial agreements are recognized and enforced in Kentucky if they meet certain criteria. The agreement must be in writing and not obtained through duress or fraud. There must be a full disclosure of all assets and debts, the agreement must not be unconscionable, and it cannot address questions of child support, custody or visitation. Also, both parties should have separate legal counsel. It is also good practice for the agreement to be executed well in advance of the wedding, and that it includes a general statement of each parties’ health.
Not everyone needs a prenuptial agreement. I’ll say that again: not everyone needs a prenuptial agreement. These agreements are recommended for couples entering their second marriages, persons who own a business or who are involved in a closely held family business, and persons with significant personal assets prior to the marriage. A prenuptial agreement serves two purposes. The first is to plan the person’s estate in the event of death, and the second is to plan in the event the marriage ends in divorce.
As uncomfortable as the discussion may be, the discussion could potentially save you millions of dollars. The bottom line is that no one knows why Bill Gates didn’t have a prenuptial agreement. Maybe he didn’t think he would get divorced (I’ve heard that before). Maybe he wanted to avoid an uncomfortable conversation, or maybe he ignored the advice of his lawyers and financial experts. Regardless, don’t be like Bill. Talk to a lawyer to determine if a prenuptial agreement is right for you.