According to Business Insider, an Oklahoma judge just ruled on the most expensive divorce in US history.
How expensive?
Sue Ann Hamm, the soon to be ex-wife of oil tycoon, Harold Hamm, will receive almost $1 billion as part of the settlement. What’s more crazy is that it could have abeen higher for Ms. Hamm because her (almost) ex is actually worth $16 Billion in total and the two had never signed a prenuptial agreement.
I’ll bet Mr. Hamm is going to have something extra generous in store for his legal team this holiday season for saving him a cool $7 Billion in potential spousal support. Mrs. Hamm? she’s probably kicking herself for thinking with her heart instead of her head 26 years ago when she got married.
This story highlights the importance of a pre-nup for both parties before saying “I do.” A pre-nup is a no-brainer for people who come into a marriage with wealth; however, it’s a much trickier conversation to navigate for those, like Mr. and Mrs. Hamm, who came together with very little financial assets.
I’m a big fan of love as much as the next gal. I love watching two people fall in love and make the ultimate commitment of marriage to each other. I cry along with the happy couples as they exchange vows, and I love watching the beginning of a love story unfold right before my eyes.
However, while I’m a romantic at heart, I never forget my practical head and since over 50% of marriages end in divorce, I think that a best practice is to plan for the end at the beginning.
I know, not very romantic, but hear me out.
As someone who has been married for eleven years, and who’s worked with couples married much longer than that, I can assure you that probably the single happiest point in your relationship is right after you get engaged. There is nothing like the euphoria of believing that your relationship is the first true love story ever told and the confidence that you will stand the test of time despite the fact that the odds suggest otherwise.
From my perspective, then, it’s best to negotiate a contract about the end when you are still in this euphoric state. You will not only determine a fair breakdown of your future wealth, you will require the least amount of legal costs since you will be fighting over the thought of money and not actual money.
By the time a divorce rolls around, the formerly happily married are usually at each other’s throats and have years of grievances that only seem to be communicated through attorneys.I imagine in 1988, when the Hamm’s married, Mr. Hamm would have gladly given half of his hard work to Sue Ann and she would have never thought to ask for an amount close to $1 Billion dollars.
In my mind, a pre-nuptial agreement is kind of like insurance, you never know if you will need it; however, once you do, you are glad that you have it. Since you can easily create something online for a few hundred dollars, it seems like a no-brainer to contemplate this before you say, “I do” no matter what your pre-marital asset situation looks like.
Have you signed a pre-nup? Do you think every couple should sign one before signing a marriage certificate?
Photo: Quinn Dombrowski
I think that they are sensible when couple come into the marriage when one partner has significantly more wealth than the other. However, for couples who enter marriage without a great deal of assets (or a similar level) it seems somewhat unnecessary as the wealth built during marriage is built by the marriage, not by the individual.
It’s true that the wealth is built together, unfortunately in a bad divorce it is also destroyed together.
Yeah, I totally see the rationale, but I don’t think I’d ever do it or encourage it, unless there is a significant wealth disparity. It just feels a little wrong to me, like you’re saying “I don’t believe this will work out in the long run”. I know that’s not quite right, but having that in the background would kind of make me feel we weren’t as committed to making the relationship work, no matter what.
Of course, I’m sure I’d kick myself if it ended up causing a real mess one day in the future, for the sake of a little ‘insurance’, but I’m optimistic and can’t see it happening (although I guess most people don’t right?)
Ha! I am with you Jason, I used to think it was wrong to say it would end before it begins, but you never know what will happen over the course of a marriage and how you will feel in a few years.
I am a divorce mediator who also mediates prenups. I would caution against the “euphoria” of pre-marriage as being a good state to negotiate a prenup. At that point in their life, they partner can do no to little wrong — they’re in love and trust level is extremely high (otherwise, why would they be marrying?). Thus, if they divorce, they would be “fair” to each other, which is not often what happens. People in the euphoric state need a mediator or individual attorneys to help them understand what they are agreeing to and to be agents of reality. Agreements created online or without attorneys/mediators open themselves up to legal challenge later on.
The statistic of over 50% of marriages end in divorce is also a myth. See http://www.nytimes.com/2014/12/02/upshot/the-divorce-surge-is-over-but-the-myth-lives-on.html