With Megxit complete and Harry and Meghan relieved of their royal duties, married life for the Duke and Duchess of Sussex is about to dramatically change: The couple must secure their own housing, provide for their own income, and pay back $3.1 million of public money spent on the renovation of their former UK home.
How can Harry and Meghan best tackle this important to-do list? Our suggestion for the Sussexes: Work out a post-nuptial agreement first before taking any further steps.
The reason why is simple. Whenever there is a big “about face” or upheaval in a marriage — whether it’s personal, financial, or both as it is with the Duke and Duchess — it’s helpful for spouses to sit down and reflect on how changing situations will affect their marriage long term, and whether it is practical to make arrangements and “pre-decide” certain matters, such as asset division and alimony, in the unfortunate event of a divorce.
Prior to marriage, these types of decisions about finances and related matters can be formalized in a “prenuptial agreement.” Once a marriage is underway, the agreement used to outline financial obligations and asset agreements between spouses is called a “post-nuptial agreement.” Like a prenup, a post-nup is designed to provide structure, clarity and peace of mind for both parties. [See our blog Why a Post-Nuptial Agreement Could be Good for Your Relationship.]
So, if Harry and Meghan haven’t sat down with their lawyers yet to draft a post-nup, here are 5 items we urge them to consider including. (Hint: these are good items for any married couple to contemplate!)
Income & Deciding Alimony
Meghan and Harry have been in the unique position of being a married couple that also works closely together. But is this about to change? Recent video footage showed Harry touting Meghan’s ability to do voiceover acting in movies. What if Meghan’s voiceover career takes off? What if she lands some plumb Hollywood roles in front of the camera? Should Meghan make a successful return to acting, she may actually be in the position of earning more income than Harry.
A post-nuptial agreement is important because it can clarify the financial independence of both spouses and include language that no alimony would be sought by either side should a Harry-Meghan divorce ever happen. On the flip side, a post-nuptial agreement can also spell out alimony terms, including naming which spouse pays and which spouse receives, and the amounts and duration of alimony payments. Making plans for alimony before the possibility of divorce arises helps to ensure that decisions about spousal support are more clear-headed and rational. It also offers a greater measure of privacy for those in the public eye.
What Happens To Marital Assets
Harry and Meghan have lived in a royal bubble with lavish palaces at their disposal free of charge, and designer clothing and even the cars they drove paid for from a public fund. Now, they are in the position — really for the first time in their marriage — to start acquiring marital assets of their own. Will they buy a house in Canada and possibly one in Los Angeles? Will they furnish their home(s) with the high end trappings they are accustomed to? Will Meghan and Harry create their own collection of art and jewelry? Will they invest in stocks and other financial opportunities?
Whenever a new marital asset is acquired, it is important to consider what could happen to that asset in a divorce. Who could claim it? How would it be split if Harry and Meghan divorce? The pair would be wise to answer these questions and create agreements around assets now. For example, would Meghan get the art and jewelry and Harry get the investments? Or, would certain items be required to be liquidated and their cash value shared between the two? Having a post-nuptial agreement could be particularly important if The Duke and Duchess settle in California, where all marital property is simply split 50-50 unless there is a prenup or post-nuptial agreement stating otherwise.
What Happens To Marital Debts
The Sussexes are starting this new phases of their marriage carrying some serious debt. Over the past year or so, UK taxpayers have sunk $3.1 million dollars into renovations Harry and Meghan made to Frogmore Cottage, their loaner home from Queen Elizabeth on the grounds of Windsor Castle. As part of stepping back from royal life, Harry and Meghan agreed to pay back the renovation costs. Will Harry make a lump sum payment from his personal reserves, or will Meghan? The couple can use a post-nuptial agreements to clarify their own sharing of payments for the debt and how this could be rectified in their marital finances. For example, if Harry pays up front, their post-nuptial agreement might require Meghan to pay Harry back her share of the debt over time. Or vice versa with Harry paying Meghan back.
Inheritance — Marital or Separate?
From reports, it appears that the bulk of Harry’s actual wealth comes from inheritances from his mother and great-grandmother (the Queen Mother). If Harry routinely takes dividends from his inheritance and puts it into a joint back account for he and Meghan to pay their expenses, the case could be made in a divorce that all or some of Harry’s inherited wealth is indeed martial property that is subject to asset division. A post-nuptial agreement can help to clarify that an inheritance is separate property.
Social Media Dos And Dont’s
More couples are including “social media” clauses in post-nuptial agreements that mandate that, in the event of a divorce, neither spouse is allowed to share details of their split – and possibly scathing opinions of each other – on Facebook and Instagram (and elsewhere on the web). In the case of a Harry-Meghan divorce, the post-nup can also outline what spouses are able to say to the press about each other. Social media clauses can kick in during the marriage, or be reserved only in the case of separation or filing for divorce.
Bottomline: A post-nuptial agreement is a great tool for coping with change within a marriage. We wish Harry and Meghan all the best, and also hope they are listening to the good advice that may be coming their way.
What You Need To Know About Getting A Post-Nup
To be considered enforceable in New Jersey:
– Both parties need separate counsel (aka, their own lawyer) when drawing up the document,
– Both parties are required to provide a full financial disclosure, and
– Neither party is forced to sign under duress.
Are you considering a post-nuptial agreement? Learn how one could fit your needs, and get answers to your questions, by speaking with an attorney. To schedule your free confidential attorney consultation, call us at 888-888-0919, or please click the button below.