In Megxit news, it has been revealed that Harry and Meghan, the Duke and Duchess of Sussex, have left Canada and will now make their new permanent home in Hollywood, California.
The move will put Harry and Meghan closer to Meghan’s mom Doria, and may be a strategic choice to help Meaghan restart her acting career.
But moving to Hollywood also comes with a significant legal change for the couple: California’s community property laws.
In becoming residents of California, Harry and Meghan face the prospect that, should they ever divorce, their financial settlement will be governed by California’s community property laws that split all martial assets 50/50 between spouses.
This could potentially mean monies dispersed to Harry as income through his various Royal trusts and inheritances could be equally split in a divorce, especially if this money is used for joint purposes such as paying for the couple’s living expenses and buying the couple’s new home. For Meghan, who seems intent on breaking into the Hollywood A-list, any income and related assets garnered through her acting career could likewise be split down the middle.
It is unclear whether Harry and Meghan understand how this change in marital asset division could profoundly impact their future finances. Hopefully their legal advisors are preparing them for all possibilities.
Their best option? For all couples moving states, there are two legal agreements that can provide for more control over asset division in divorce, regardless of where the divorce takes place:
Post-nuptial agreement — a post-nuptial agreement is a document a married couple can put together that specifies how certain assets and debts would be split in the event of a divorce. Harry could state that his personal allowance from Prince Charles is off limits in the divorce, for example, or Meghan could exclude her movie income as martial income and clarify that it is her own money.
Other items addressed in a post-nup can include alimony amounts and decisions about how certain large assets would be divided in a divorce, such as the family home. This agreement, when executed properly, can be valid and enforceable regardless of which state oversees the couple’s divorce. By making this strategic move, Meghan and Harry could avoid California’s community property laws.
Prenuptial agreement — a “prenup” can address all the same financial issues as a post-nup, but is an agreement settled before the marriage. A prenup is a smart move for today’s engaged couples, many of whom are getting married later in life and entering marriage with more assets. [Learn more: Millennials Are Different. And So Are Their Prenups.]
Did Meghan and Harry (ages 36 and 33 when they wed) secretly sign a prenup before they married? If they did, they have managed to keep it safe from the tabloids. So for now, all we can say is enjoy sunny California, and if you haven’t already, please take time to talk to a lawyer.
Are you interested in learning how a prenuptial or post-nuptial agreement can safeguard your future? We can help. To schedule a free virtual consultation with an attorney, contact us today at 888-888-0919, or please click the button below.