By: James McGlew
The perils of getting married without a prenuptial agreement were made clear this week with the news of the divorce of billionaire Harold Hamm. Mr. Hamm, Chief Executive Officer of Continental Resources, was ordered to pay nearly $1 billion to his now ex-wife in one of the largest US divorce judgments ever. The order requires Mr. Hamm to pay his ex-wife one-third of the settlement, about $320 million, by the end of 2014 and the remainder to be paid in monthly installments of at least $7 million. This award will help to make the former Ms. Hamm one of the 100 wealthiest women in the United States.
As I'm sure you can tell by now, Mr. and Mrs. Hamm had no prenuptial agreement.
While the vast majority of individuals may have less to protect then Mr. Hamm, the safeguards and protections of a prenuptial agreement should never be overlooked. Prenups are ideal protection vehicles that can be used in many different circumstances. Some of the most common scenarios my clients face when they seek a prenuptial agreement are:
- Couples planning to marry who have accumulated wealth prior to their marriage
- Divorced individual(s) who plan to marry for a second time and wish to protect their assets for their children
- High net-worth parents whose children are about to marry and they wish to protect their child’s future inheritance
Prenuptial agreements benefit all parties and allow couples to protect their separate property, reduce future conflict and support the goals of their established estate plan. I encourage couples planning to marry to discuss these concerns and work together with an attorney familiar with New Jersey’s laws governing prenuptial agreements and determine what documentation is best for their situation prior to walking down the aisle.
While many couples will never need to use their prenup, wouldn’t it be better to have one in place so you can prevent yourself from making multi-million dollar monthly payments as Mr. Hamm now finds himself doing?
UPDATE 1/7/15 – It has been reported that Mr. Hamm's ex-wife is seeking more financial compensation than what the court had originally ordered. Mr. Hamm's ex, Sue Ann Arnall, has reportedly rejected a check in the amount of $947,790,317.77 sent to her in early January 2015. Imagine how much time and money could have been saved by simply having a prenuptial agreement.