By Amy Kniss
The hullabaloo surrounding the made-for-TV wedding of E! reality show starlet Khloe Kardashian and Los Angeles Lakers’ Lamar Odem calls into question the sanity of any celebrity -- no matter how far down the Hollywood food chain -- who weds without a prenup.
Despite the bling celebrities bring to the altar in pre-marriage assets, pre-nuptial agreements deal with the millions celebrities stand to earn over the course of the marriage and what each party stands to gain -- or lose -- should the union crumble. Prenups may get more publicity among high-profile pairs, but they provide much-needed protections for the 40 percent to 50 percent of first marriages that end up coming undone.
Here’s how you can draw up an effective prenup to protect your assets, should you meet and marry your soul mate and it doesn't end as a match made in heaven but a typical Hollywood ending: divorce.
Things You'll Need:
- Lawyer
- Financial documents
- Full disclosure
- Unemotional expectations
- Contingency plan
- List of deal-breakers & consequences
Step 1
Lay your cards on the table. Crafting a valid prenup
requires both parties to fully disclose their financial situation
-– income, investments, assets and debts. Not fully disclosing your
financial situation may result in a breach of contract. Both
parties must be able to make an informed decision when signing a
prenuptial agreement; if one of you keeps an ace up your sleeve
making a fully informed decision is impossible.
Madonna’s most recent ex-husband knew her net worth when he said:
"I don't want a penny if this marriage dies."
Jennifer Aniston and Brad Pitt reportedly decided against a prenup,
but agreed to keep their finances separate and take their earnings
with them should they split, which they did without a fight over
finances.
Step 2
Keep it clean. The agreements made in a prenup are
enforceable only if the court deems that the terms are reasonably
fair to both parties. Obtaining separate legal counsel helps
accomplish this and gives each party unemotional, objective legal
advice that provides piece of mind
For example, including the right to perform random drug tests in a
prenup may indeed be fair if your partner is a former addict and
may be in charge of your children, but if your future ex-spouse has
no history of substance abuse demanding random drug tests in your
prenup will be less enforceable. The prenup between Nicole Kidman
and former cocaine addict Keith Urban specifies that if Urban uses
illegal drugs he will not net a penny of Kidman’s $150 million
fortune.
Step 3
Avoid the cost of losing big without a prenup by spelling out
spousal benefits. If one spouse works and manages to
support the other through medical school and on to join a private
practice, and it ends in divorce does the spouse that provided the
steady support get half of the practice and the doctor’s earnings?
State laws differ on this; many states only split the assets
acquired in marriage 50/50 after ten years of marriage.
Spell out monetary contributions like retirement benefits and
continued health insurance. These details are important to
maintaining your standard of living -- especially if you’re the
spouse working half-time, for lower wages, or raising kids while
your spouse advances his or her career. Otherwise you may be left
without relevant work experience and less than your fair share
should the marriage dissolve under the pressure of a midlife
crisis, health issues, downsizing, an empty nest or other
factors.
Step 4
Take precautions to protect what you have. If you want to
protect your dignity should your spouse stray consider adding a
cheating clause to your prenup.
Catherine Zeta-Jones' requirement for Michael Douglas: if he
cheats, and she can prove it, Zeta-Jones receives a lump-sum
payment of $5 million in addition to the $2.8 million a year in
spousal support. Those without six- or seven-figure alimony may
still require a modest "bonus" from a cheating spouse in
a prenuptial agreement -- like demanding he surrender his Harley
Davidson or she part with her closet of Channel bags. They may not
miss you, but they’ll surely miss their prized possessions.
Step 5
Set a date. Of course you’ll set a date for the wedding
well in advance of the ceremony, but you should also set a date by
which the prenup must be signed. Legally a prenup signed under
duress can be contested in court, if one party feels pressured to
sign the prenup because the wedding date is fast approaching then
be forewarned that the prenup might not stand up in court. For this
reason it is best to make sure the prenup is signed at least a
month before the day of the wedding.
Tips & Warnings
- A spouse may challenge the validity during divorce proceedings in an effort to get the prenup agreement thrown out by a judge.
- Beware of the "sunset clause" that eliminates the prenup’s validity should the marriage survive beyond a specified number of years. If Katie Holmes and Tom Cruise make it 11 years their prenup is void and Holmes is entitled to half of Cruise’s fortune, under California law. Former General Electric head lost $150 million when his wife divorced him because a sunset clause voided their prenup after 10 years of marriage.
- The more specific you are about the issues that matter most to you the better. Prenuptial agreements that are overly broad are more likely to be appealed.
How to Hammer Out a Prenup originally
published on eHow.com
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