“In every single state, a wealthy person is better with a prenup.”
So says a close observer of the recent marriage of astronomically wealthy Facebook founder Mark Zuckerberg, who adds that he “cannot comprehend Zuckerberg marrying without one.”
So, did Zuckerberg and his new bride, pediatrician Priscilla Chan, execute a prenuptial agreement?
No one seems to know — or at least those who do know aren’t talking publicly about such a document.
The Zuckerbergs were married in California recently, one day after Facebook’s initial public offering. We have remarked in previous blog posts that California is among a distinct minority of states with a community property regime that can differ markedly from most other states in how property division is legally handled.
Georgia, for example, does not provide — as does a community property state — that all property not clearly identified as the separate property of a married partner will be equally divided (50/50) in a divorce. Georgia courts, rather, administer an equitable division of property.
In such a case, a Georgia court would consider a premarital agreement in its property division determination.
Concerning the Zuckerberg marriage, and given California’s community property status, commentators are saying that, even if a prenup was not executed, the timing of the marriage — one day after the Facebook IPO — is key and a well-considered legal move by the social media magnate.
What the public offering does is valuate the company precisely prior to the marriage, with Zuckerberg’s separate wealth being clearly established and capable of precise calculation. That wealth will always be his, and there can never be any acrimonious or murky battle concerning it.
What Chan can argue in the future if the marriage sours, say the experts with strong interest in the matter, is that she is entitled to a portion of any options that vested in Facebook stock during the marriage. Further, and in the absence of a premarital agreement, she could claim that stock previously held by Zuckerberg that appreciated in value during the marriage did so solely through his efforts.
Legal experts say that such a claim is hard to prove for a publicly traded company.
They also suspect that, given Zuckerberg’s tremendous financial success prior to the marriage, it is highly likely that the couple signed, or at least considered executing, a prenuptial contract.
Source: Thomson Reuters News & Insight, “Zuckerberg’s post-IPO wedding is smart legal move,” May 21, 2012