Engagements are, for the most part, something to be celebrated. They are joyful occasions and moments to be treasured. Celebrity engagements get more than the usual fuss and fanfare, and with the power of social media the news spreads quickly. Two major A-lister engagements have been announced recently. Firstly, Cristiano Ronaldo to long-term girlfriend Georgina Rodriguez, followed quickly by possibly the most celebrated engagement of the decade, Taylor Swift to American footballer boyfriend Travis Kelce.
Hot on the heels of the news of such engagements, however, comes a great deal of public scrutiny. What’s the ring like? How much did it cost? Did he get down on one knee? And further… what about a prenup?
Stowe Partner Anu Kurl explores celebrity prenups and whether you should consider one yourself.
Why do celebrities get prenups?
Nuptial agreements are regular features of celebrity weddings, particularly in the United States but their influence is being felt not just across the pond but for ordinary couples who wish to put measures in place to protect individual asset bases and to put in place plans and protections in case a divorce does arise.
There have been alleged reports of a prenup constructed for Ronaldo and Rodriguez ahead of what is set to be an exceptionally lavish wedding. It has been reported than in the event of a divorce, Ronaldo would pay $50million in alimony (spousal maintenance in England and Wales), as well as child support of $500,00 per month and $5.6million in real estate assets.
There has been no news of a Swift-Kelce prenup yet, although it is widely anticipated given that her net worth is reported to be 20 times his.
High-net-worth individuals and celebrities will often be advised to have a prenup drawn up ahead of their wedding. This is to ensure that their individual assets, wealth, brand, business and more are clearly defined. Prenups require full financial disclosure, meaning everything owned by each person, as well as anything they have an interest in, needs to be declared.
The agreement is then drawn up by a lawyer, to set out ownership and how assets should be retained or divided if the couple divorce. In some states in the US, and other countries across the world, the document is legally binding, and couples must abide by their decisions if they break up.
How are celebrity finances divided in divorce?
Let’s say that Taylor and Travis didn’t get a nuptial agreement. Hypothetically, along with international devastation about their split, they may come up against some barriers and conflict if they ever decided to divorce. The laws are different in the United States, but in England and Wales there would potentially be complexities with business assets, overseas assets and property.
Business assets
Business assets need to be valued in divorce. This will need to be done professionally. The most likely outcome is that, if the asset is deemed to be matrimonial, shares will often need to be transferred from one person to the other.
It is important to give a truthful and realistic valuation of a business. If there is any misrepresentation, issues can arise.
For celebrities and wealthy individuals, this will likely be a central factor in their divorce negotiations. In some cases, both people will have an interest in the business and it will need to be decided whether one person will buy out the other or an alternative arrangement made.
Overseas assets
Many high-net-worth individuals have wealth held in different country, whether in the form of property, shares/investments or cash in an overseas account. These will need to be included in financial disclosure before you start negotiations. However, it can be difficult to locate and understand overseas assets. It might be tricky to enforce an order made in relation to the asset by the English courts as it depends on the overseas jurisdiction and whether they recognise UK orders.
Property
Taylor Swift reportedly owns eight properties across four American states, totalling c.$100m. Her fiancé Travis Kelce has three properties. In the event of a divorce, it would need to be decided whether they were matrimonial assets or not.
In England and Wales, the amount of time the couple had spent in each property and whether it was treated as a marital home would be considered. Property disputes can be complicated, especially if there are children involved. The first consideration of the Court is the children and then the housing needs of both the parties. Any nuptial agreement will need to take into consideration the needs of the children and where they would live in the case of a divorce.
Inheritance
In some cases, wealth is contained within the family. This means that inheritance can be significant. In the event of a divorce, any received or expected inheritance will need to be factored into the financial settlement.
Inheritance is a complicated area and whether it is considered a matrimonial asset to be divided depends on how it has been used.
Find out more about how inheritance is dealt with in divorce.
Should I get a prenup agreement?
Prenups can be very useful agreements for everyday couples, as well as high-net-worth individuals.
Whether you get a prenup is between you and your partner, however it is important that this is an open and honest conversation. The further in advance you discuss the matter, the better as it allows time to emotionally, as well as practically, process the implications.
Many people think prenups are a bad omen, and to put one in place amounts to expecting the marriage to fail or declares a lack of trust. However, they have a practical purpose (although not the most romantic one). Many couples will never need to use their prenup.
You could consider a prenup if:
- You have considerable assets from prior to your relationship
- You have your own business
- You expect substantial inheritance
- You have children from a previous relationship you wish to leave inheritance to
Remember, prenups are living documents and should be updated to reflect your and your spouse’s current financial circumstances as your family and finances evolve.
Useful Links
What is matrimonialisation in divorce?
Prenuptial agreement mistakes and how to avoid them
The growing importance of prenuptial agreements
Download the guide How to: Reviewing your financial disclosure
