What Michael Jordan’s Divorce Can Teach Us About Protecting Our Money

Michael Jordan’s divorce in 2006 was about far more than heartbreak. It came with a real price. The divorce between Michael Jordan and Juanita Vanoy is reported to have cost him $168 million, making it one of the most costly celebrity divorces of all time. Vanoy is also reported to have kept the marital home, a 25,000-square-foot estate in Chicago.

When Jordan married again in 2013, this time to Yvette Prieto, he was far more prepared and had a new playbook to follow. Michael Jordan’s prenup for his second marriage outlined what would happen if the relationship ended, and it gave him protection in case he ever needed it. According to media reports, the prenup gave Prieto $1 million a year if the marriage did not last ten years. If the marriage extended past ten years, that figure increases to $5 million per year.

Below, our Charlotte premarital agreement attorney outlines how to ensure you are protected before you say ‘I do’ in North Carolina.

Why even the wealthiest athletes can make costly mistakes

Celebrity divorces often become costly and chaotic due to high-stress lifestyles, large egos, intense public scrutiny, and constant temptation. These factors combined can result in poor decision-making. Of course, it is not only celebrities who make costly mistakes during the divorce process. There are many financial traps people can fall into when getting divorced. The most common of these are as follows:

• Allowing emotions to guide decisions: There are many emotions felt during divorce. It is important that these do not guide your decision-making throughout the process. Do not use the divorce to punish your spouse, as this will incur unnecessary legal fees, and the courts will not look favorably on it. For example, do not fight over property that has no meaning to you simply so your spouse does not get it in the settlement. It is just as important that you do not relinquish property out of guilt or just to speed up the process.
• Mismanaging property: Many people do not know how to address the issue of property division during divorce. For example, some spouses want to keep the marital home for sentimental reasons but fail to realize they cannot afford the mortgage, property taxes, insurance, and other upkeep costs. Additionally, not all property is valued equally, even when it may seem to be. For example, $50,000 in a savings account is not equal to $50,000 in a retirement account.
• Not working with professionals: It is always recommended that you have legal representation when going through a divorce. An attorney can advise you of the laws impacting your case, negotiate with your spouse, and ensure your rights are upheld. You may need the help of other professionals, as well. For example, if you believe your spouse is hiding assets, you may need to work with a forensic accountant. Trying to go through the entire process alone can be very costly.

In addition to the above mistakes, one of the biggest errors people make is simply failing to plan. They do not collect the necessary financial documents before filing, they fail to create a realistic post-divorce budget, and perhaps most importantly, they do not have a premarital agreement in place that can ensure they are protected.

How to protect yourself without killing the romance

One of the best ways to protect yourself during a divorce is to have a premarital agreement in place. A premarital agreement removes the decision-making component of the process, as many of the decisions have already been made. When a premarital agreement is legally valid, family law judges will generally enforce its terms, unless there are issues such as lack of voluntariness, unconscionability, or insufficient financial disclosure under North Carolina law. Drafting a premarital agreement does not have to kill the romance. In fact, they can be used to have an open and honest conversation about your relationship before making anything official.

It is important to choose the right time and place when broaching the topic of a premarital agreement with your betrothed. It is critical to mention the need for an agreement before you are in the midst of wedding planning. Ideally, you should raise the topic at least six months before the wedding. This not only gives each of you time to plan what to include in the agreement, but it can also serve as evidence that both parties signed the contract voluntarily, in the event of a future dispute.

Instead of bringing up the topic unexpectedly, it can also help to suggest a time to talk. The conversation should occur in a private setting where you each feel comfortable and free to speak your mind. Do not bring it up during a stressful moment, such as in the middle of an argument or after a long day at work.

It is also important to frame the conversation in a positive way. Emphasize that you both need an agreement in place to ensure you are both protected and have the clarity you need. Use language such as ‘our’ and ‘we’ to reinforce the idea that you will both benefit from having an agreement in place. It can also help to compare drafting a prenup to other important steps for planning, such as purchasing life insurance or drafting a will.

It is critical that you avoid making demands or ultimatums, as this can feel very confrontational. Actively listen to your partner and any concerns they may have without dismissing them. Drafting a prenuptial agreement should be something you do together, and not something you are imposing on them. Having a constructive conversation can help you both feel respected and heard.

Lastly, it is critical to work with a Charlotte premarital agreement attorney. Premarital agreements can only provide the protection you need if they are drafted properly. For example, these agreements must be in writing and signed by both parties, and are enforceable only if entered voluntarily with proper financial disclosure or a valid written waiver of disclosure. It is also recommended, although not required, that both parties have separate legal counsel who can ensure their rights are protected.

Our premarital agreement attorney in Charlotte can help

Michael Jordan’s divorce and his later prenup provide important lessons about protecting yourself. If you are getting married, it is critical to speak to our Charlotte premarital agreement attorney at Epperson Law Group, PLLC. Our experienced attorney can draft an agreement that complies with the law and is enforceable in the event that you ever need the protection it provides. Call us now or contact us online to schedule a consultation with our attorney and to get the legal help you need.