Could any of us look away when news broke in June about Tom Cruise’s split from Katie Holmes? This is Cruise’s third divorce and, if various media reports are to be believed, he was cagey enough to insist on a prenuptial agreement.
What’s in it is open to speculation and rumor. Based on the history of divorce among the wealthy and famous, it’s not a stretch to predict Holmes will walk away with a lot of money.
Still, even with prenups, lawyers and all kinds of advice, there’s no guarantee a divorce will be smooth. Such agreements have been around in the U.S. since the late 19th century and although they undoubtedly saved some bitterness over the years, there are still plenty of salacious divorce stories to zing around the Internet.
Most of these celebrities didn’t need to read AdvisorOne’s Top 10 Critical Financial Tips During Divorce, since their phalanx of lawyers and advisors certainly had those areas covered.
So in the spirit of education (OK, and prurient interest) AdvisorOne looks at 5 Super Costly Divorces of the Rich and Famous. Some of them had prenups, others didn’t. Either way, the costs were staggering, particularly the one that topped our list.
(Paul McCartney and Heather Mills on June 10, 2002, a day before their
wedding. Photo: AP)
5. Paul McCartney vs. Heather Mills
Cost: $48 million
The “cute” Beatle’s first, blissful, marriage included Sir Paul allowing his wife Linda, who had a notoriously bad voice, to perform at concerts, and on albums. Fans might not have been happy with the arrangement, but the couple lived an idyllic life while raising their children. It all came to a sad end when Linda died of cancer in 1998. That left Paul alone for the first time in decades.
Then Heather Mills came along. Sir Paul was smitten. His children weren’t so sure. He took the plunge anyway and being the romantic who penned ditties like “Silly Love Songs,” he skipped a prenup. That might have been a silly mistake.
When things went sour in 2006, after four years, the couple landed in court. Trial papers leaked to the press showed the judge’s irritation with Heather and his admiration for Sir Paul as a witness. Still, Heather was granted about $48 million, plus $70,000 a year to help care for the couple’s daughter.
Ever the romantic, Paul has remarried, to Nancy Shevell, a New Yorker who has money of her own, and once again reportedly skipped a prenup. Heather on the other hand, claims to have spent most of the millions she received on charities, businesses and two properties for her daughter.
Perhaps Paul and Heather could have stayed together if they had followed the advice in this previous AdvisorOne article, Seven Tips for Couples on How to Achieve Money Happiness.
(Madonna and Guy Ritchie at Cannes in 2008. Photo: AP)
4. Madonna vs. Guy Ritchie
Cost: $76 million to $92 million
Movie director Guy Ritchie (his recent movie was “Sherlock Holmes: Game of Shadows”) once reflected on his marriage to pop star Madonna, calling it a soap opera. Should he have been surprised? Even if he was, he couldn’t have been blindsided by the melodramatic coverage of the couple’s breakup.
After eight years and two children, one adopted, the split was announced in 2008. The press had a field day. There was no prenup (it seems the “Material Girl” missed an obvious chance for protection), but initial reports assured the gossip-reading public that Ritchie didn’t want a dime of Madonna’s money. All he cared about was the children.
Well, not exactly. Late last year, the couple settled on a figure somewhat higher than “not a dime.” Media reports about the settlement ranged from $76 million to $90 million plus the value of two properties in the U.K.
Madonna may have been the wealthier party in this couple, but many women facing divorce remain relatively financially illiterate, as Liz Davidson reports in her most recent blog for AdvisorOne, How Advisors Can End the Real ‘War Against Women.’
(Tiger Woods and Elin Nordegren laughing it up in June 2009. Five months
later the laughter turned to tears. Photo: AP)
3. Tiger Woods vs. Elin Nordegren
Cost: $110 million
The story of the golf great’s epic fall from poster boy for living and playing well to philandering bum is well documented.
And despite his pleas and apologies (and an offer reported at $80 million) his wife decided after six years of marriage she’d had enough. Yes, the couple had a prenup, but evidently Tiger’s transgressions rendered it obsolete. That original agreement reportedly called for Tiger to pay out $20 million after 10 years if divorce was on the table.
After his lifestyle choices became public in November 2009, Tiger took the unusual step of revising the prenup to include the aforementioned $80 million if Elin stuck it out for several years. It wasn’t enough. Maybe there was no price Elin could put on her dignity.
She sued for divorce and walked away with a reported $110 million plus child support. That figure pales in comparison to the $750 million reported around the Internet when the divorce was first made final.
Perhaps Tiger’s advisors should have considered an asset protection trust (APT), as attorney Jim Duggan suggested in a previous AdvisorOne article on 5 Ways Rich and Famous Can Hide Assets
(Michael and Juanita Jordan in 1999 when Michael announced his retirement
from the NBA. Photo: AP)
2. Michael Jordan vs. Juanita Vanoy Jordan
Cost: $168 million
Basketball legend Michael Jordan and his wife signed a prenup when they got hitched in 1989. The agreement called for the couple to split their assets 50/50 if they ever went their separate ways.
In 2002, after 13 years of marriage, the couple was headed for divorce. Then they decided to give marriage another try. That worked for a time, but by 2006 the honeymoon, the marriage and the reconciliation were over.
Despite the prenup, the division of property and money was far from simple. After intense negotiations, an agreement was reached. Juanita received $168 million, plus the couple’s Chicago estate and custody of their three children.
Although the price tag was hefty, MJ got off relatively easy compared to the terms of the prenup. The final amount equaled just a third of his total worth.
While we’re not sure this happened in Michael and Juanita’s case, a recent Spectrem study reported on AdvisorOne found that divorced and widowed women were more likely than men to employ a financial advisor.
(Rupert and Anna Murdoch at the Oscars in 1998. Photo: AP)
1. Rupert Murdoch vs. Anna Murdoch
Cost: $1.7 billion
Rupert Murdoch has never been shy when it comes to letting the world know what’s on his mind. But considering his costly history with divorce, it seemed odd that he would tweet his opinion about the Tom Cruise-Katie Holmes split and the former’s involvement with Scientology.
In case you missed it, the media king tweeted this to his followers: “Watch Katie Holmes and Scientology story develop. Something creepy, maybe even evil, about these people.”
Of course, when Rupert divorced his second wife, Anna, in 1999 after more than 30 years, there was no Twitter and no Facebook, and print journalism was still going strong. At first, the breakup was described as amicable.
But then Anna dug in, saying she wanted to make sure the couple’s children kept their rights regarding Murdoch’s News Corp. trust. She also managed to walk away with $1.7 billion (yes, that’s billion) in 1999.
There’s no need to shed tears. Rupert landed on his feet, remarrying a scant 17 days after the divorce was finalized. Anna has also since found a new love—lucky lad.
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