Just one day after Facebook's IPO debut, Mark Zuckerberg and his longtime girlfriend Priscilla Chan tied the knot in a small backyard wedding ceremony.
Zuckerberg and Chan met as undergraduates at Harvard University in 2004, and now live in together in a modest Palo Alto, Calif. house where the celebration was held.
While the newly crowned king and queen of Silicon Valley tend to fly fairly low under the radar when it comes to their personal affairs, the timing of the wedding seems to come at a financially advantageous time for both Zuckerberg and Chan.
In the event that a preuptial agreement was mapped out and signed, Zuckerberg and Chan would have established terms for the division of assets, which would include shares of Facebook stock.
While a spokeswoman for Facebook has yet to comment on the possible signing of a prenuptial agreement, the Facebook IPO debut would be a significant factor in helping establish the value of their assets, in the event of any future divorce battle that lacks a premarital agreement, lawyers said.
In fact, even if Zuckerberg and Chan had continued their relationship without the husband and wife label, Chan could still have potentially lay claim to a much larger portion of assets, including a chunk of her new hubby's $20 billion in Facebook shares.
In California, people who live together without the benefit of marriage could claim they had an agreement to pool resources and efforts, Napa, Calif., lawyer Robert Blevans told Reuters. And although they are hard to prove, those claims can get really ugly, Blevans added.
In the Reuters report, Blevans goes on to cite the case of Anthony Maglica, the founder of the company that makes Maglite flashlights. In 1994, an Orange County court awarded $84 million to Maglica's girlfriend Claire, who took his name and lived with him for 23 years. Although an appeals court reversed the award in 1998, she later negotiated a $29 million settlement.
The same logic tends to apply when negotiating the terms of a prenuptial agreement, according to another legal source.
One of the primary reasons that wealthy people enter into prenups is to prevent the type of carnage that can come with divorce, Garrett Dailey, an appellate attorney in Oakland, Calif., told Reuters. Better to sort it out in advance, he added.
As in most other states, a prenuptial agreement in California typically states how a husband and wife would split the assets in the event of a divorce. While California is one of a handful of states with community-property laws, which state that any property created after the marriage is essentially community property and should be split evenly after any divorce, it's common practice for most couples to waive those rights.
Most states typically rely on equitable-division rules, which give more flexibility to a judge in dividing assets. But In Chan's case, she could lay claim to a portion of the options and grants in Facebook stock that vest during the time of their marriage, lawyers said.
A marriage with no prenuptial does not necessarily mean no big bucks for Chan. If there were no prenuptial, or if there were and Chan contested it, she could also try to go after stock Zuckerberg held previously if she could claim it increased in value during the relationship and the increase was due directly to Zuckerberg's efforts.
But while the latter is factual, Lawyers said that is hard to prove for publicly-traded companies.
In an organization of this size, that's not going to happen, Blevans said.
But still, in the case of a messy divorce, it would likely help Zuckerberg that the marriage took place the day after the initial public offering.
The value of the company is absolutely known, Dailey said. There's no dispute over it. If the timing of the marriage so close to the IPO was accidental, then it was a very nice coincidence, said Blevans.
While there is no guarantee the couple signed an agreement, citing divorce cases involving wealthy people such as actor Mel Gibson and singer Paul McCartney who skipped prenuptials would seemingly set a good example for what a high-profile divorce can be like without one.
In every single state, a wealthy person is better with a prenuptial, Dailey said. I cannot comprehend Zuckerberg marrying without one.