Most California residents have heard this advice: consider a prenuptial agreement before marriage. But almost just as many Californians might not appreciate who can benefit from a prenuptial agreement or exactly what the consequences to go without one. Some might dare to include former California governor Arnold Schwartzenegger on such a list. Schwarzenegger is currently undergoing a divorce from his wife of almost 30 years reportedly as a result of his infidelities with a nanny, who later bore him a child.
Valued at around $400 million, there are many assets to be divided in this divorce. If the two had signed a prenuptial agreement prior to their marriage, his wife might not see even a small portion of these funds. However, somewhat surprisingly, the couple did not sign any type of prenuptial agreement in 1986 when they wed. At the time, Mr. Schwartzenegger had already made over ten movies and acquired a substantial amount of wealth from his efforts.
Because the two did not sign such an agreement, California courts will divide the property as per California law, which is down the middle. California is a community property state, which means that courts will divide property evenly between separating parties. This means his former wife stands to receive approximately $200 million post-divorce.
While this is an example of a high-asset divorce, any couple can potentially benefit from a pre or post-nuptial agreement. Whether a couple makes $50,000 annually or $500,000, they will benefit from delineating together, pre-divorce, how their property should be divided in the event of separation. While it is often truly difficult to think about the prospect of divorce before even getting married, being practical and understanding the unexpected can occur may save a substantial amount of argument and struggle in the long run. Furthermore, completing an agreement at the time of marriage, when the parties are more than amicable, means a resulting agreement that should work to benefit both individuals to the greatest degree possible.
Source: Entertainment News, “Arnold Schwarzenegger’s Divorce Settlement: The High Cost of Cheating Exposed,” Anna Drago, Jan. 13, 2014