In 2015, Elon Musk was number 94 on Forbes Magazine’s list of The World’s Billionaires. At that time, Musk’s estimated net worth topped $13 billion as the self-made mogul focused his energies on investing in electronic motor vehicles and space exploration. More recently, the father of five has been back in the news after his second and current wife, Talulah Riley, filed for divorce.
Divorce isn’t something new for Musk whose first marriage to Justine Musk, who is the mother of his five children, ended in a messy divorce after which she claimed her ex cheated her out of millions by insisting she sign a postnuptial agreement. Musk and Riley, who wed in 2010, also previously divorced in 2012 and then remarried in July of 2013. In the couple’s first divorce settlement, per a prenuptial agreement, Riley received $4.2 million of Musk’s then estimated net worth of $680 million. However, in the three years since the couple’s second wedding, Musk’s wealth has increased considerably and it’s unclear how this may impact the couple’s impending divorce as well as Musk’s success as a business mogul.
In her divorce petition, Riley has given Musk 30 days to respond with specific financial information which is necessary to figure out “issues of spousal support, property valuation, property division and tax consequences.” The couple’s main residence is in the state of California which, unlike Massachusetts, is a community property state, meaning that “all the money that was made during the marriage and the appreciation of property he already has is shared between the couple.”
While the couple had a prenuptial agreement that dictated the terms of their first divorce settlement, that agreement would not apply to their second marriage. According to court documents, however, Musk filed a divorce petition which he later withdrew in 2014 and, at that time, the terms of the proposed settlement were dictated by an existing prenuptial agreement. This agreement, however, may have since been amended to include more favorable terms for Riley.
For investors and stock holders who have a lot riding on Musk’s success, news of his third divorce is likely unsettling. Business owners who divorce can be negatively impacted by a split financially and personally as a divorce settlement may force a business owner to transfer or sell a portion of a business or could result in a business owner shifting priorities and becoming less risk aversive.
Source: Town and Country Magazine, “Elon Musk’s Divorce Could Cost Him Billions,” Sam Dangremond, March 24, 2016
