The Phenomenon of Celebrity Prenuptial Agreements
Prenuptial agreements have become almost a prerequisite for celebrity couples today. In the past, some high-profile marriages were personal statements in defiance of the pre-nup trend. Now it is rare to see a star-studded couple wed without the protection of a prenup. Celebrity and entertainment contracts provide a framework for retaining assets or income should a relationship end. Celebrities are generally much more concerned about protecting intellectual property rights, endorsement fees, and increased income than many marriages seem to be about protecting family assets or support payments.
It’s difficult to know what the underlying motivation is for the rise of celebrity prenup pacts . Did celebrity culture create a society expecting marriages to end? Are celebrities truly risk-averse when it comes to marriage? Or is it simply that celebrities need contracts for every part of their lives, and marriage is no exception?
Contemporary celebrity relationships are featured everywhere in media, which makes prenups one of the few things that can be kept private. In this day and age, the breakup of a celebrity couple is front page news, along with details about new relationships. Ending a marriage in a divorce is one of the most personal life events, and may be of less interest to the public (and the media) if scandalous details are not at issue. A prenup means that the tabloids will not follow spend hours guessing and speculating about the reason for the breakup.
Essential Elements of Celebrity Prenuptial Agreements
In many ways, prenups for celebrities offer the same terms for asset division and spousal support as those between mere mortals. However, celebrities inevitably have additional concerns that need to be addressed in greater detail and more carefully. Here are several commonly negotiated terms that every prenuptial agreement must address:
The celebrity’s assets.
Usually, prenups include provisions related to the assets, revenues, royalties and promotions that the celebrity partner has amassed. Some prenups offer the right of first refusal, meaning that the non-celebrity spouse is entitled to make a counter-offer on any joint purchase in order to buy the celebrity out. Others provide that the celebrity will retain ownership of any royalties or revenues during the marriage and retain all profits from any book, merchandise or paper that uses the celebrity’s likeness or name.
The brand.
Much celebrity income is based on the strength of the brand. The brand encompasses everything from trademarks to endorsements to television shows. Some prenups include a complete severance of commercial ties with the non-celebrity spouse, no matter what the terms of a future divorce settlement.
The kids.
While many prenups include boilerplate child support provisions that refer the parties to state laws, celebrity prenups might discuss additional topics. For example, if the mother of a child is a celebrity, fans and the media may want to share more details about the child with their audiences. The non-celebrity spouse might want to restrict the number of pictures that can be taken of the child.
Confidentiality agreements.
Finally, every prenup needs to include a confidentiality provision to protect the celebrity’s image and brand. While the couple is married, they can have joint assets or properties. It is also possible for the non-celebrity spouse to share images or relevant personal information with a third party. For example, after a prenuptial agreement is signed, the couple can begin filming a reality show. If these images are leaked, the celebrity’s image may be tarnished.
In general, prenups divide property acquired during the marriage from that which was owned prior. These provisions ensure that the non-celebrity’s financial world remains separate from the celebrity’s. In practice, this means the celebrity’s vast portfolio remains generational while the non-celebrity spouse lives off the modest income earned during the marriage.
Celebrity Prenups of Note: The Well-Known
"The concept of prenuptial agreements is nothing new; however, there are several instances over the years that stand out as particularly noteworthy – even newsworthy."
One of the most famous prenup cases took place in 2001, when soccer star, David Beckham, and Spice Girl, Victoria Adams, exchanged vows at a lavish ceremony in Ireland. The couple signed a prenup that reportedly granted the pop star a settlement of $50 million (later reported to be just $10 million). As reported, if either party cheated, the prenuptial agreement would be voided. And while a cheating scandal seemed to be on the horizon, that never happened. Today, the two are still married and once again raking in the money.
One associated with actor, Charlie Sheen, it had to be the most controversial pre- and post-nuptial agreements to date. Back in 2011, on CBS’s hit sit-com, Two and a Half Men, Sheen began to show some erratic behavior. Though, it was the couple’s divorce that stood out the most. At the time, he and then wife, Brooke Mueller, were fighting over their home as he feared for the safety of their twin boys. Ultimately, a judge awarded the home to the kids; but, they later returned it to Mueller.
To date, actress, Britney Spears, seems to have the most filed prenuptial agreements with double the number of high profile prenups. It all started in 2004 when she wed childhood friend, Jason Allen Alexander, and subsequently the two filed out of state. In addition, Spears entered into an agreement with her second husband, Kevin Federline, through their divorce. But the most interesting of all is her most recent nuptial i.e., with husband, Sam Asghari who filed an agreement stopping him from asking for spousal support.
Although the settlement amount has never been publicly released, orders can be broken down by how assets accumulated during the marriage.
The Advantages And Disadvantages of Celebrity Prenups
As with any agreement, prenuptial agreements have both pros and cons for celebs. One of the major advantages of prenups is that they provide clear protection for a celebrity’s assets – including bank accounts, real property and business interests – in the event of a divorce. Assets that would be otherwise considered marital or community property and subject to equitable distribution are saved from that division if the proper disclosure and procedures are followed. Additionally, in the event one spouse dies, a prenuptial agreement not only sets out estate issues but can also plan for the custody of future children should the prenuptial terms include estate planning provisions. Another advantage is that prenuptial agreements are private contracts . Remember, divorce proceedings, like family law in general, are matters of public record. While it’s natural for some people to want their divorces documented publicly, many celebrities prefer the details of their divorce be kept under wraps. The potential downside of a prenuptial agreement is that courts will scrutinize the terms to ensure that they are fair. Courts typically will not uphold terms that would leave a spouse destitute upon divorce. Celebrities are subject to the same laws and guidelines as the rest of us and a prenuptial agreement is not something where the terms can be dictated. And while some celebrities may be arrogant enough to think that they are above the law, this is not a situation where they can or should be able to bend the rules.
Legal Aspects and Guidance for Drafting
The preparation of a prenuptial agreement can be a complicated process. While some states maintain specific laws concerning premarital agreements, most states, including New York, only recognize the common law principles which govern all contracts. As such, the drafting of a prenuptial agreement will generally raise issues of contract law and constitutional and procedural issues.
Experience in the drafting of premarital agreements has shown that specific attention must be given to the following:
General Considerations
Once you have tackled the more difficult issues of a prenup – those concerning money and assets – consider discussing other less obvious provisions of the contract:
• Confidentiality issues – no public release of private information without consent of the other party;
• Religious upbringing of children;
• Can one or both spouses be immobilized in case of physical/mental issues;
• Unanticipated future increases in earning capacity ("sunset clauses") – e.g., if mommy takes time off work to have kids and becomes a stay-at-home-mom, what then happens to her share of marital wealth?;
• Domestic violence provisions to protect each other.
Finally, if there is a matter about which you have both agreed, but which seems "too personal" to include in a formal prenup, consider having a lawyer draft a "side" letter on firm stationery, which is signed by both husband and wife. This is also true when negotiating agreements on postnups or divorces. While some courts will not admit side letters into evidence (i.e., admissibility of evidence), others may be very receptive to them. For example, if there was an agreement to pay college tuition, but nothing was written down, the side-letter would come into play. The "sides" may also be premarital or post-marital agreements.
What’s on the Horizon for Celebrity Prenups
As celebrity culture continues to evolve, the landscape of prenuptial agreements may shift as well. With the increasing normalization of open relationships and non-traditional family structures, such as polyamory or co-parenting arrangements outside of marriage, future celebrity prenups could include provisions that reflect these unconventional partnerships. For example, these agreements may outline the agreed-upon boundaries for such relationships and include the rules surrounding any additional parties involved in the arrangement, including child custody agreements for children born out of wedlock. Similarly, the global reach of social media means that public attitudes to marriage , divorce, feminism, and gender equality have shifted drastically over the last decade and will continue to do so. The concept of a "sunset clause," a specific date after which the prenup is nullified (as examples, former NBA player Chris Bosh has a prenup with a sunset clause if he and his wife remain together for 10 years, and Arnold Schwarzenegger and Maria Shriver have a sunset clause in their prenup), addresses this issue by giving spouses time to prove the viability of their marriage. Being that this clause attempts to tackle the critical issue of time to permanence, such clauses may become a regular feature of celebrity prenuptial agreements in the future.