A lesson to be taken from Chris Rock’s divorce: review your prenuptial agreement.
The comedian just recently his announced his divorce from wife Malaak Compton-Rock. Rock is seeking shared custody of the couples two daughters.
Prenuptial Agreement Expired
According to court documents, it seems the prenuptial agreement the couple entered into when they married in 1996 has expired because the couple has been together for so long.
Two words: sunset provisions, also known as expirations in prenuptial agreements. While sunset provisions aren’t too common, they are a planning tool that can be an essential part of a client’s financial picture. This is especially the case when one of the spouses is significantly wealthier than the other. What a sunset provision does is entitle one spouse to receive a set amount of assets should the marriage remain intact for a certain length of time.
“Many times, it’s assumed that these agreements never expire, but that’s not necessarily the case,” says Avani Ramnani of Francis Financial Inc. “We encourage clients to revisit them every four or five years. Refresh your memory and make sure you’re following the stipulations that are in the prenup.”
Revisiting Prenuptial Agreement
Because of these sunset provisions, it’s important that you (and your spouse) revisit your prenuptial agreement to ensure that provisions still apply. Bringing in an attorney can help you to assess the agreement’s validity.
“It’s good to do a quick review, but you should seek legal help to evaluate that prenup and make sure that it’s valid, followed and taken into account while planning,” says Ramnani.
Source: Investment News, Chris Rock’s divorce offers lessons in divorce planning, December 30, 2014
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