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Eminentoes
A Facebook Marriage
Why did Mark Zuckerberg marry the day after the largest IPO in U.S. history?
Sometimes timing is everything. In one week, Mark Zuckerberg turned 28 years old, became a billionaire in the largest tech IPO in U.S. history, and got married. Sure, 28 years old is a reasonable age to get married and a great age to become a billionaire. But after dating for ten years, why did he choose to marry his girlfriend the day after his IPO?
It may be coincidence, or it may be that he was ready to settle down after accomplishing what is probably the biggest goal of his life. But it also could be prenuptial insurance in case of problems down the road.
By most accounts, Priscilla is pretty lucky, marrying the guy of her dreams who just happens to be America’s newest billionaire. However, if the marriage doesn’t work out, things may work out quite a bit better for Mr. Zuckerberg than they do for his wife.
That’s because the Zuckerbergs live in California and California is a community property state. In a community property state, any income earned during the marriage (with the exception of inheritances and certain gifts) is owned by the couple as an economic unit instead of either the husband or the wife individually. Therefore, in the case of divorce, the assets of the couple are split 50-50.
But, income that was received by either individual before the marriage — even one day before — is separate property. If the couple divorces, the person who originally earned the separate property, or anything bought with it, keeps all of it — 100%.
By getting married the day after Facebook went public, instead of anytime before (during the decade he was dating his now wife), Mark Zuckerberg ensured that all the earnings from his big day will remain his, should his marriage not work out at any time.
Of course, most of his earnings from last Friday came in the form of stock, and stocks gain and lose value. But the capital gains of stocks during a marriage are still considered the separate property of the person who owns the stock in a community property state. In other words, Mark Zuckerberg keeps the value of those stocks even if they appreciate to a trillion dollars and no matter when he cashes out his shares.
Dividends, on the other hand, are treated as new income and community property; they are split 50-50 in the case of divorce. But most tech companies don’t distribute dividends, and if they do, they are generally paltry sums. Instead, investors flock to stocks like Facebook because of the prospect of making huge capital gains.
No doubt Mark Zuckerberg will go on to make plenty of money, and his marriage will probably thrive. But if it doesn’t, he will almost certainly leave the marriage much better off than his new bride — all because he got married the day after getting rich instead of any day before.
Letter to the Editor View all comments (34) | Leave a comment
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David Herr| 5.22.12 @ 6:28AM
If Mr. Zuckerberg holds his Facebook stock in a clearly identified separate property account, any dividends accruing thereto (as if Facebook will ever pay dividends) will NOT be community property -- they will continue to be separate property. If he sells some facebook stock and switches to more mundane, dividend-paying securities, those dividends will remain separate property, so long as the stock never touches a community account. Only if he takes sales proceeds or other income from that separate property account and transfers it to a community account, or spends it on something like a house for him and his wife, will it lose its separate property characterization (it would be deemed a gift to the community, absent specific documentation, signed by his wife, that the asset was to remain his separate property).
Of course, this is probably all moot, since unless Mr. Zuckerberg is a complete idiot, he has an airtight prenup.
Darin| 5.22.12 @ 6:34AM
Two words. Who cares?
Appleby| 5.22.12 @ 6:52AM
If Mrs. Facebook is too stupid to get a decent lawyer to advise her before she signs on the dotted line, she deserves whatever she gets.l
But I too wonder who exactly cares about one more shack-up- becoming a pro forma Celebrity Marriage.
Melvin| 5.22.12 @ 8:27AM
Remember back when couples decided to get married for love, and to create a family for the future, without the aid of an attorney?
"My dearest future Mrs. Zuckerberg, let thou profess my deepest love for the....." "As your attorney, I must strongly urge you despite your urges to utter any phrase or words that could be construed a quasi contractual utterance." "You mean I cannot say that I love her?" "As your attorney I advise you not to say that." "Wait a minute what are you doing in my bedroom?" "As the stockholders attorney we thought it best and in everyone's best financial interest that I remain here so that you do not utter anything to this woman as granting a long term relationship. For you to enter into a long term relationship the stock holders would first have to vote on it.
The stock holders have relayed to me with their intent of you remaining in your, hook-up relationship rather than a long term marriage commitment."
"Oh, so marriage bad, hooking up good." "From a legal stand point yes Mr. Zuckerberg."
RickZ| 5.22.12 @ 7:18AM
Jealous, frustrated writer - wannabe lawyer. .... ......
All without reading any of the relevant agreements - prenuptial, stipulations, etc.
.
Albert Constantine Jr.| 5.22.12 @ 8:23AM
I care very little, and didn't see the movie, but if he's been dating her for ten years, doesn't that conflict with the notion that he started Facebook at Harvard in order to get dates, or is the whole odyssey merely a boy meets girl story?
Tyndale| 5.22.12 @ 10:15AM
Very good point, Mr. Albert C. So at 18 years of age he was dating and had stopped -- at that point -- because he was then fairly committed to the new Mrs. S(z)uckerberg?
Or should the now Mrs. S(z)uckerberg realize that he was dating around quite a bit during this past decade?
1. She's stupid. Any guy that is using his six figure legal team to aid and advise in marriage/family? planning ain't worth the millions. Got it, honey?
2. Like others posit here, this marriage will indeed fail. I don't want that or wish that on them, but they, like millions of others their age (and older), haven't the slightest clue as to what true love is.
3. It is a shame that this is lionized by our press, but all too predictable. I hope parents are pointing at this and saying to children all, "What profit a man if he gains the world, yet loses his...."
See the good 5 min. video for more -- http://www.youtube.com/watch?v=EfdHlNKLcM8
crossworked| 5.22.12 @ 8:31AM
Facebook is over. The market will value the stock and not "emotions". Will Obama step in to save them before the election? I am sure they are to big to fail.
MikeBee| 5.22.12 @ 8:37AM
OBVIOUSLY, a marriage that will not last. Already planned NOT to last. What happened to full commitment, 'till death do us part?" Zuckerberg cares little for people, including his wife, and only for his money. Did someone say that he was an Obama supporter?
Denver todd| 5.22.12 @ 9:01AM
According to one account I read, the marriage was planned for a particular date, but the date for the IPO floated around and was not planned. So, we don't really know if Z planned it this way on purpose.
Truncheon| 5.22.12 @ 9:41AM
Whatever the case may be, I find it counterproductive to smear with imputation of motive and other base speculation, celebrities who finally do the right and correct thing, and marry.
Since we can presume Mr. Facebook is regarded as a celebrity and hero in certain nerdish circles, it is good he sets an example of traditional matrimony, despite his ten years of sin and fornication.
This is a *good* thing, and should not be smeared in the interest of a petty story on some stupid blog.
Crassus| 5.22.12 @ 9:53AM
Don't you have a profile of Kim Kardashian you could run instead of this?
Bob K.| 5.22.12 @ 9:57AM
Ah yes! More words of wisdom from a member of the legal profession!
Today it is hard to believe that it was lawyers for the most part who bestowed this great Republic on us.
Now they feast on our body politic and some are even leeches in the rectum thereof.
PolishKnight| 5.22.12 @ 10:34AM
It's interesting we were just having a discussion on this blog, yesterday, about the high rate of unwed mother families and the lack of incentives for men to marry.
Even if what the author is claiming is true, and somehow, Zuckerman avoids acquiring any assets that she could gain access to, she is still entitled to earn money on her own. But let's say she didn't and became a "housewife" and then Zuckerman does the stereotypical villainous thing and dumps her for a hot young secretary.
So what?
She still enjoyed decades of a life that most people could only dream of: riding around in private jets, living in luxury mansions, and her children getting the best benefits imaginable. Even if she was kicked out of the door with the clothes on her back, she'd still be better off than most people out there. Within a few years, she could be educated and back in the labor force and doing well for herself.
However... in modern times alimony has been rationalized not only as continued "support" but also as "compensation" for the "sacrifice" housewives make. So when women would tell me that they were _entitled_ to quit their jobs while simultaneously making a "sacrifice" and basically I was to just work in the salt mines and say thank you, I declined.
Conservativism is dying because many conservative men are chivalrous chumps. They're (almost) as nuts as leftists.
Betina| 5.22.12 @ 10:46AM
If she doesn't look like a plotting gold digger, I don't know who does. She's working hard for the money. Ten years? That's a long term investment.
RCV| 5.22.12 @ 11:54AM
Ah, you can tell just by looking at her, huh?
Mike 3/505| 5.22.12 @ 4:57PM
Yep.
Betina| 5.22.12 @ 6:26PM
Just like I could tell Obama was a sleazebag.
JmsA| 5.24.12 @ 12:37PM
She's actually well along her medical school studies.
Jay| 5.22.12 @ 11:15AM
Anyone miss the part where she graduated med school? She wouldn't have been entitled to alimony anyway in a community property/equitable distribution state since she has plenty of earning potential all by herself.
Having the IPO before the wedding may have actually decreased the need for an icky prenuptial, since existing law would take care of protecting the lion's share of Zuckerberg's assets.
John Navratil| 5.22.12 @ 12:08PM
I'm obviously not a lawyer, but didn't Zuckerburg own that fraction of the company before the IPO? What did the IPO do but move a privately traded share into a publicly traded one? Why does this matter to the community property?
skedaddle| 5.22.12 @ 12:13PM
Wow - you all really know how to suck the romance out of a wedding.
Bob S| 5.22.12 @ 1:48PM
Young people these days, they don't get married for love anymore. It most likely was a calculated move by Zuckerberg so he can keep more of his billions. Look at Bill and Melinda Gates. Bill's fortune isn't hoarded (like Steve Jobs' fortune was). He and his wife both do charitable work with the fortune Bill made from Microsoft. I'll bet that Zuckerberg will be more Jobs and Gates and hoard the money for himself, and he'll be less Jobs when he divorces like so many young people today do.
Ernie Banks| 5.22.12 @ 7:25PM
The author is flat out wrong in this case. California is a community property state (true), but income from separate property remains separate property. Zuckerberg's shares in Facebook are his separate property. Income and capital gains from his separate property remain his separate property.
MikeBee| 5.24.12 @ 8:15AM
Ernie (are you really the old shortstop?)
You are correct. This is the reason that Zuckerberg delayed his marriage until after the IPO. So that what he gained from the IPO was separate property from her property. She is probably very happy right now, because she doesn't have to partake in all his losses, either, once she files for divorce.
Since when does a Classifieds section of a newspaper develop a net worth of over $1 billion, anyway? That's really what Facebook is, an advertising site with pictures. The stock price of Facebook should continue to drop, like a load of bricks. Once again, investors who really know nothing about the internet became far too entranced with it.
POST American| 5.23.12 @ 12:06AM
-----The 'new' face of data collection,
tracking, surveillance and degradation.
Brought to you by NSA---DARPA, and,
probably, originally underwritten
----------------------------------------by YOU!
This is -----the 11th hour.
mmercier| 5.23.12 @ 6:07AM
National Security Administration and Defense Advance Research Projects Administration are two of the operations on this planet that give you the capability to publicly spout paranoid nonsense.
mmercier| 5.23.12 @ 6:20AM
One likes to believe they are comings to take one away.
The true horror comes when one realistically understands... no one gives a $hit about you.
mmercier| 5.23.12 @ 5:57AM
I got married because i love my wife.
We are both still poor.
JmsA| 5.24.12 @ 12:38PM
You're not poor; you're both rich beyond compare.
Paul A'Barge| 5.23.12 @ 2:34PM
Was there a pre-nup?
pigletrios| 5.24.12 @ 10:32PM
Who cares? The American public spends too much time on this drivel!