Power Divorces: Do They Have to Be Messy?


Celebrities and other powerful people frequently surround themselves with advisors and advocates to secure their assistance in navigating any number of personal or professional endeavors, including marriage. Many celebrities have significant assets to protect when they marry. So how does a celebrity or a wealthy and powerful individual properly prepare for nuptials realizing that it is likelier to fail than to succeed? Take Bill and Melinda Gates. Bill had already started Microsoft when he married Melinda and, although the marriage lasted 27 years, it still ended in divorce. What can these powerful people do to protect their estates, children, businesses, and reputations?

When possible, they keep assets separate through a prenuptial agreement.

“Prenup” used to be a four-letter word but, nowadays, couples bringing significant assets to the marriage treat their prenuptial agreement as an insurance policy in the event that the marriage fails. People may grow apart, and a couple that structures an exit strategy in advance of their wedding is a couple that is realistic about the odds. However, a prenup won’t prevent a fiery divorce battle over custody and child support. And even an upheld prenup can be contested by an unhappy party hoping to extract a higher payout.

Having clearly defined ownership of individual assets prior to and during marriage can prevent costly untangling down the road. In states like California, prior ownership can dictate how the assets (and liabilities) will be treated. Generally speaking, anything created or earned prior to marriage remains that person’s separate property. It is best to keep those funds separate; do not comingle them with joint funds and do not spend time managing these assets in order to preserve their separate quality. Inherited gifts and bequests to one person are also that individual’s separate property. But disputes can arise when separate funds are comingled or community time is spent handling those funds. Depending on the state, assets accumulated during the course of the marriage can either become community property or marital property, so things can get a bit murky. For instance, in California, one spouse might have created a business before the marriage commenced. Without a prenup or postnup—more on those below—the income from that party’s services working in the business would be deemed, at least in part, community property.

While prenups typically set forth intentions around standard divorce terms, some celebrity prenups are known to include more specific requests. The prenup between Jessica Biel and Justin Timberlake reportedly includes a clause disallowing infidelity, and Mark Zuckerberg and wife Priscilla Chan are said to have signed a prenup that requires weekly dates together, as well as some quality alone time for Priscilla. These are typically referred to as “lifestyle prenups,” but are not standard language in ordinary prenups. In fact, many lawyers (including myself) will refuse to include these lifestyle terms in a common prenup.

If you haven’t signed a prenup, it’s still not too late.

Even if a marriage has already taken place, it is still not too late to lay down legal groundwork in the event of a divorce through a postnuptial agreement. These can be employed by couples at any time to help protect old or new assets in the event of divorce. Consider if this step had been taken by Jeff and McKenzie Bezos. Amazon progressively grew in value during their union. The dissolution of that marriage led to the world’s largest divorce settlement, at a whopping $38 billion to McKenzie (who was there creating Amazon with Jeff in the beginning). It is possible that a postnuptial agreement could have clearly outlined how to separate such an enormous estate. However, just as with a prenup, it’s important to note that a postnup still will not help when it comes time to reach an agreement over custody and child support.

What I love about being a matrimonial/family law/divorce lawyer is that nothing is cookie-cutter. Even with black letter law, facts very often do not match the basic law. The beauty of a well-drafted prenup or postnup is that it can lay out a plan that, if necessary to effectuate, should be as cookie cutter as possible. The nuances and law application to the facts will be gone, replaced by a hopefully very clear recipe on how to divide an estate and determine spousal support (alimony) unless waived. But the exception will always be child custody and child support; those can never be controlled by a prenup or postnup.

The more you have, the more costly your divorce could be.

If no valid prenup or postnup exists in a celebrity or high-profile marriage, or even in some cases where they do, the steep divorce-related costs can extend far into the future. Filmmaker Steven Spielberg tops the list of sky-high settlements after allegedly paying $100 million to his first wife, Amy Irving, and Harrison Ford is not far behind with a reported settlement of $85 million (to wife Melissa Matheson) that also included a split of future royalties from the popular Indiana Jones series. Pop icon Madonna’s divorce from filmmaker Guy Ritchie also came with a hefty fee—Ritchie allegedly received a settlement of “up to $92 million” following their split, though exact amounts were kept confidential.

Power couples shouldn’t overlook estate planning.

Estate planning should start at the beginning of any marriage, especially one that includes considerable wealth, to help provide clarity around who inherits the community and separate assets upon the death of either spouse and to help avoid costly probate and minimize taxes. There are a number of trust vehicles that help a couple pass wealth to future generations and avoid taxes. Careful and considerate planning is crucial—some estate tools are permanent even in the case of divorce, and cannot be undone, such as irrevocable trusts.

A reputation is as important to protect as one’s financial or physical assets.

Prominent celebrities with substantial business interests and career reputations to uphold should consider how a messy divorce can affect their reputation, interests and careers down the line. Proper planning at the onset of a marriage can help keep things from deteriorating, but many celebrities still find that they need to engage the help of a publicist or PR team when dealing with divorce proceedings in order to shield their image and protect their business interests. This is especially true when a spouse is accused of inappropriate behavior.

Many couples starting out don’t need a prenup because there really isn’t anything to protect. But often by the time of a second or third marriage—and especially in power marriages where individuals bring more wealth to the table—advanced planning is key. With so many major celebrities and ultra-high-net-worth couples calling it quits, it is clear that status alone is not enough to keep people together, and, indeed, may be the undoing of many high-profile marriages. While it will not do much for romance, for those with substantial asset portfolios, pragmatic considerations and planning can protect both sides during one of life’s messiest outcomes: divorce.

“Power Divorces: Do They Have To Be Messy?” By Stacy D. Phillips was published in Forbes on August 16, 2021. Reprinted with permission.