By Jacqueline Porter
No one ever gets into a marriage thinking it will end, and after 25 years of marriage Jeff and MacKenzie Bezos never thought their relationship would now be over. Unfortunately, the divorce statistic is compelling for couples over 50. If you are contemplating marriage, you will need to be clear-eyed about how a marital union will affect your future, especially as your life and circumstances change. Jeff may not have thought he was going to be a billionaire but obviously as he contemplates divorce there is much to be learned from his journey. These lessons include the financial, legal and emotional costs of an uncoupling.
Takeaway 1: Consider the residual effects of a divorce on your legacy if your relationship does not go the distance and you came into the marriage with, or subsequently built, the lion’s share of what are your marital assets.
Jeff and MacKenzie are unfortunately a growing statistic. At a time when couples should be feeling good about the wealth they are creating together and looking forward to a financially secure retirement, more and more couples over 50 are choosing to divorce. The stats reveal that almost 50 percent of married couples will divorce and the divorce rate for people over 50 in the last 20 years has doubled. According to RetireHappy.ca many long-term marriages are falling on the rocks due to the wear and tear of the daily grind, the empty nest, the other lover, or the reality of parallel lives that do not touch. Women now own 33 percent of North America’s wealth. Women are also marrying and having children later. These women are at risk of paying a significant price for not taking active steps to protect their wealth.
Takeaway 2: A spouse is entitled to 50 percent of the assets that were created in a marriage. This means half of Jeff’s fortune would have always belonged to MacKenzie.
It is 2019 folks. Jeff and MacKenzie have been married for 25 years and by all accounts many sacrifices were made on both sides to advance Amazon. She gave him the green light to leave his position as VP and take a risk with his dream of being an entrepreneur. They moved to Seattle to start Amazon and it has been reported that she did the bookkeeping for many years. Jeff once touted that they used to work together, and he read her very impressive resume and then found out later she was very attractive. My point is she’s no dummy. Yet for some reason the media seems stuck on portraying her as a gold digger who is getting half of HIS fortune. We know there is another woman mixed up in this but it’s not MacKenzie last time I checked. Based on marital rights Jeff’s share of Amazon’s fortune was only 50 percent his. Perhaps a more accurate media account of their story should have been: the world’s richest couple instead of the world’s richest man – unless Jeff obtained a post-nuptial agreement.
Takeaway 3: Money conversations need to happen on a regular basis to check in on family wealth and determine if changes need to be made.
It has been reported that Jeff and MacKenzie did not have a postnuptial agreement. This is not uncommon. For most people talking about money can be tenuous and unromantic, especially when the conversation has to do with protecting their wealth. In my practice I find that women are particularly challenged when it comes to advocating for themselves and safeguarding their assets in a relationship. This can lead them to put off important conversations around pre and post nuptial agreements or worse, avoiding them altogether. Consider in Jeff’s case what is at stake – his $137 billion fortune made up primarily of his shares in Amazon. Women also have a lot to lose. Women live 4 years longer than men and if a separation occurs later in life, we may not have the time to make up the assets we have lost to a divorce. Yes, pre and post-nuptial agreements are difficult conversations to have. However, it is even more awkward and difficult to have these conversations when you’re divorcing and have nothing in writing to work with.
Takeaway 4: Enlisting the help of a professional to facilitate these conversations may help.
I often say to clients that my least favorite planning to do with a client is death-bed planning when a client is in the hospital and something terrible has already happened. Now the client is pressured to talk about estate planning based on a health crisis that has led them to contemplate their mortality. For me, it doesn’t get more uncomfortable than that. The same can be said for talking about money once you have decided to divorce.
It pays to be proactive. Crunch the numbers. What is your net worth and how may it change? What are you prepared to give up should things fall apart? Surround yourself with a team of professionals who can help you to do this, such as an accountant, financial planner and lawyer. This team can help you to resolve contentious financial matters with your partner in a dispassionate and professional manner-especially as your circumstances change. For example, as Jeff’s company grew and he went public, it may have been a good time for him to have discussed a post-nup with MacKenzie, assuming it was never discussed before. At the time when Amazon went public his team of professionals could have breached the subject with her all in the name of planning for Amazon’s future. This is of course assuming the terms of the post-nup would be fair and it would offer her the chance to seek independent legal advice. The point is if Jeff and MacKenzie had a post-nup, at least it would have given them a starting point when they decided to divorce, recognizing no agreement is iron clad.
Takeaway 5: Love does not conquer all.
I have no doubt that these two people believed in the sanctity of marriage based on their many years together. Chances are they were very much in love when they married and would not have predicted they would be facing a divorce. Yet the divorce stats do not suggest that love is a predictor for a couple staying together. What if your relationship doesn’t work out? How will the separation impact your financial security in the future? Single women who are contemplating a serious relationship with a potential partner need to think carefully about the financial consequences of a breakup. This includes thinking objectively about your circumstances and how they may change in the future after you have tied the knot. For example, are you contemplating marriage early in your career? Did you receive an inheritance, and do you plan to keep them separate from marital assets? Are you contemplating getting married for a second time? What assets are you bringing into the relationship? Your financial circumstances, your age, and the age of your children will determine what steps you will need to take to secure your wealth. The truth is, most women will likely not end up like MacKenzie Bezos. Women often negotiate away their wealth in a separation or divorce without realizing what their decision will cost them down the road.
Simply put, if you cannot discuss protecting the wealth you have created before meeting your partner consider the cost of not having the conversation: How will it weigh on your financial security and legacy as your life and circumstances change? How will it affect your relationship with your partner when difficult conversations cannot be overcome? Not exactly a recipe for happily ever after.
The views and opinions expressed in this column are those of the contributor and do not necessarily reflect those of Equitable Bank. Any information provided is for information purposes only and Equitable Bank makes no representations as to the validity, accuracy, completeness or suitability of any content. You should seek the advice of a qualified professional or undertake your own research before making financial decisions.