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Oil mogul's lack of prenup could prove costly

In oil-rich states like Texas, the combination of the words "oil tycoon" and "divorce" might make one immediately think of the cost of such a split. Especially if the couple involved lacks a prenuptial agreement, the money that could be moved around during and after a divorce could be staggering. For oil magnate Harold Hamm, this may indeed be the case, as he and his wife are reportedly close to breaking-up.

Hamm and his spouse married over two decades ago. At the time, he was worth around $16 million and she was an attorney, so their lack of a prenup is somewhat surprising. However, at the time, his bride may have brought her own wealth and earning power into the marriage, potentially making both comfortable without a prenuptial agreement.

Still, marriages can experience significant change as the decades tick by, and this case is no exception. Over the years, Hamm's fortune grew substantially, and since 2007, his business's value has quintupled. It is estimated that he is now worth about $11 billion.

Importantly, huge chunks of the man's wealth were earned during, not before, his marriage. In community property states like Texas, earnings and profits achieved during a marriage are most often subject to some sort of division upon divorce. In Hamm's case, he could end up paying several billion dollars to his wife in what would be the biggest divorce settlement in U.S. history. In 1999, media mogul Rupert Murdoch parted with $1.7 billion in his divorce, at the time the biggest reported American settlement.

As these cases make clear, a strong prenuptial agreement is an asset in its own right during a divorce. In Texas, a prenup can protect specific assets that were obtained either before or during the course of a marriage. However, many couples are so busy planning a wedding and focusing on family matters that they overlook the benefits of such a document. Texas also offers post-nuptial agreements, which can also protect assets according to a party's wishes and can be entered-into after a couple has already been married.

Source: GoBankingRates.com, "Harold Hamm's lack of prenuptial agreement could cost $3 billion," Stacey Bumpus, June 14, 2013

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

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