In 2014, Gwyneth Paltrow – who of course dominated celebrity media coverage as the declared victim/victor of the “ski massacre trial” – popularized the term “conscious uncoupling” to describe the amicable dissolution of her marriage to then-husband, Chris Martin. While the term has become the subject of numerous memes and gifs over the past 9 years, its relevance, and more importantly, its underlying logic, is now at the center of yet another celebrity divorce – that of Reese Witherspoon and Jim Toth.
While only those in the inner circle really know what occurred during the marriage and what will occur during the divorce, what we do know is that Witherspoon and Toth prepared for this worst-case scenario and financial uncoupling by executing a premarital agreement before their marriage that defined how their property and finances would be handled in the event of a divorce. Still further, the couple stayed tried and true to their savvy financial uncoupling by liquidating assets in which they each owned an interest over the past few years, such as Witherspoon’s production company, Hello Sunshine, and several pieces of real property. This creation of such liquidity will inevitably make the division much easier and allow both parties to move forward without arguing about who will keep the property, whether it should be sold, its value, or a myriad of other issues that typically plague warring soon-to-be ex-spouses. Just pick up any People Magazine or tabloid and you will be inundated with articles surrounding Brad Pitt and Angelina Jolie’s legal battle over Chateau Miraval, a home and vineyard in the South of France in which both parties maintained a controlling interest.
So, what can we learn from the Witherspoon/Toth divorce?
Plan for the future. Regrettably, divorce is a reality for nearly half of all families in the United States. Even still, a premarital agreement (“prenup”) is so often considered a dirty word and something that is only necessary if you are protecting family money or considering another marriage after divorce. However, a prenup, especially in a State such as Texas that strongly favors contracts, can offer future spouses protection against protracted litigation in the event of a divorce. The prenup can define how each asset will be divided, whether any spousal support or alimony will be paid or waived by the parties, and how the parties will purchase property and pay for debts during their marriage. For business owners, such agreements can provide peace of mind to investors and partners by defining how the business interest will be divided or even valued in the event of a divorce. Such agreements could even mirror similar provisions in the governing documents for the business. Still further, similar agreements, known as post-marital agreements, can be executed after marriage. Whether executed before or after marriage, these agreements are really nothing more than an insurance policy designed to protect one or both spouses from the instability and financial drain that can often result from a divorce.
Of course, Witherspoon and Toth may still have issues concerning the custody of their son, but it appears that they have both significantly uncomplicated their divorce by planning for this moment even prior to their nuptials. And anyone considering getting married or a conscious uncoupling should take a page out of their book.
The laws governing divorce and the enforceability of premarital agreements (or even post-marital agreements) can vary state to state, making it is essential for anyone considering divorce or entering into a prenup or post-nup to consult with an experienced family law attorney in his or her jurisdiction.