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For ten years on the sitcom Friends, Courteney Cox starred in the role of Monica Geller, a beautiful and successful 20-something who prided herself on being fastidious, competitive and bossy.
Sadly, though, life does not always imitate art, and these days Ms. Cox appears to be proceeding with her divorce in ways that are distinctly un-Monica-like. Not only does she seem to be neglecting details, but she could be jeopardizing her sizeable, hard-earned fortune as a result. For example, last week I read about these two particularly surprising aspects of the Courteney Cox-David Arquette divorce case:
1. Ms. Cox recently filed legal docs responding to Mr. Arquette’s divorce petition, and –apparently following his lead –she did so without a lawyer.
2. The court docs apparently do not mention a prenup.
Can you imagine how Monica would react if a friend of hers was following the same path? I can’t help but think the conversation would begin with one of Monica’s characteristically blunt assessments. “Are you crazy?” she would blurt out.
Of course, if I had the opportunity to advise Ms. Cox, I would phrase things somewhat differently. “Ms. Cox, I think you should re-consider your strategy,” I would say . . . and then I’d ask, “Are you crazy?”!!
First, let’s review the importance of using a lawyer.
As I have discussed before, there are four broad categories of divorce alternatives: Do-It-Yourself (DIY), Mediation, Collaborative and Litigation. Of these, Litigation is the most common, but keep in mind, “litigated” does not necessarily mean the divorce ends up in court. “Litigation” is a legal term meaning ‘carrying out a lawsuit,’ and even though they’re litigated, the vast majority of all divorce cases (more than 95 percent) reach an out-of-court settlement agreement.
Why are lawsuits a part of divorce? Because no matter how “friendly” you’d like your divorce to be, it is extremely difficult and emotionally-trying to reach agreements on child custody, alimony payments and the division of assets and liabilities. Legal matters, livelihoods and personal futures hang in the balance, and it makes perfect sense to hire trusted divorce professionals to help you effectively navigate the sea of forms, legal filings and complicated rules of evidence.
Even if the divorce is fairly amicable, the laws are complex, and there are numerous financial and tax implications associated with dividing retirement plans, real estate, intellectual property, stock options, etc. Without the right professional advice it can be very easy to make irreversible mistakes. What’s more, children and dealing with custody and other parenting issues can further complicate the situation, as well.
Remember: Enlisting the expertise of a lawyer does not mean your divorce must be contentious. In fact, just the opposite is true. Most divorce attorneys (or at least the ones I would recommend) will always strive to come to a reasonable settlement with the other party and ensure that your divorce settlement agreement accurately incorporates the agreed upon points.
Now, let’s discuss the benefits of a prenup.
A prenup (short for “prenuptial agreement”) is a contract signed by both parties before their wedding. By using a prenup, both the husband-to-be and the wife-to-be decide in advance: 1) what property will be considered separate property, 2) what property will be considered marital property, 3) how any marital property should be divided, 4) particulars about estate planning and inheritances and even 5) how much alimony will be paid and for how long if there’s a break-up down the road. In short, the prenup details what the couple’s property rights and expectations would be upon divorce and if done correctly, it can be an excellent way to supersede your state’s marital laws. However, in order for a prenup to be effective, each party must be represented by its own separate attorney, and the agreement:
- must be in writing.
- must provide full disclosure (no hiding of assets and/or liabilities).
- must be executed voluntarily and without coercion.
- must be executed by both parties, preferably in front of witnesses.
- cannot be unconscionable, meaning that it cannot be completely lopsided giving one party so much more than the other.
- should be in a recordable format.
And, just to reiterate, the prenup must be executed before the wedding!
Since it appears Ms. Cox did not have a prenup in place, the money she earned during her twelve-and-a-half year marriage will now be considered marital property –and because California is a Community Property state it will be split 50-50. (And in case you’re wondering, she’s reportedly worth $75 million, while Mr. Arquette is worth $18 million.)
Maybe years ago, Ms. Cox considered the idea of a prenup awkward and unromantic. If that was the case, she could have pursued other options that would not have required her fiancé’s approval. For instance, she could have established a Domestic or Foreign Asset Protection Trust.
What about a postnuptial agreement?
Even if there were no pre-marital protections in place, Ms.Cox could have pursued a postnup. Similar to a prenup, a postnup is a contract between husband and wife, but it is entered into and signed after the wedding.
Could Ms. Cox have protected her assets with a postnup? It’s impossible for me to say. But, I do know this: When celebrities divorce, one of the biggest points of contention is typically intellectual property rights. These rights cover property such as patents, trademarks, copyrights and royalties and other contractual rights, and depending on the individual circumstances, they can be worth thousands, if not millions, of dollars.
What’s more, any intellectual property rights obtained during a marriage may be considered marital property –and that means they may be divided during divorce. Although the specific rules vary from state to state, the general rule of thumb governing intellectual and other property is this: Value that’s created during the marriage must be divided.
Again, it’s impossible to know with certainty how a postnup would have impacted the division of assets, in general, or how it could have impacted the division of intellectual property rights to, say, the sitcom Friends, in particular. But even so, if you’re a married woman involved in a similar business endeavor, my advice is simple: I believe having a postnup in place is usually better than having nothing at all.
All women –whether they’re single, engaged, happily married, contemplating divorce, or in the middle of divorce proceedings –can learn something by observing how celebrities handle their break-ups. In this particular case, I feel that Courteney Cox is being reckless and short-sighted. . . and I honestly think Monica Geller would feel the same way.
All articles/blog posts are for informational purposes only, and do not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.