What California couples can learn from celebrity divorces

There is a common misconception that only celebrity couples or extremely wealthy couples should have a prenuptial agreement. However, with more Californians getting married later or getting remarried, prenuptial agreements may be something that more people should consider.

Traditional divorces don’t usually make the headlines. Often it is only when a celebrity couple splits that there is talk of prenuptial agreements, child support payments and property division, though all these issues pertain to non-famous couples as well. While these divorces often consist of more money, assets and publicity, there is something to be learned from them. Take, for instance, the recent announcement that Katie Holmes has filed for divorce from Tom Cruise.

The couple enjoyed a less-than-private relationship from the beginning. Even Cruise’s proclamation that he was in love with Holmes took place in front of cameras on Oprah Winfrey’s couch. So, after Holmes filed for divorce last week, it is not surprising that talk of their prenuptial agreements and child custody issues have been making headlines.

According to sources, the couple did, in fact, have a prenuptial agreement in place. In the agreement it was determined that Holmes would receive $3 million from Cruise for every year the couple stayed married, which was ultimately six years. The agreement also states that each actor would keep his or her own professional earnings made during their marriage.

By having this stipulation in the prenup, it means that the couple will not have to abide by California community property laws, which requires spouses to divide assets equally. Each spouse will keep his or her own earnings, and Holmes will also collect nearly $18 million from Cruise.

Even though the couple had their daughter, Suri, prior to getting married, prenuptial agreements cannot release a spouse from paying child support. When it comes to child support and child custody, those terms remain up for negotiation.

Because of the financial protection a prenuptial agreement can offer, spouses who have substantial assets or significantly different levels of assets should consider having a prenuptial agreement in place before getting married.

Source: Reuters, ” target=”_blank”>Tom Cruise and Katie Holmes Divorce: Who Will Get What?” Deanne Katz, June 29, 2012