KOBE BRYANT OR THE CASE FOR A PRENUP

Celebrity marriages don’t usually have stellar track records, so news of a divorce may be surprising but not unexpected. However in the case of Kobe and Vanessa Bryant, such news is sure to make a splash. The main issue here is not the divorce in itself but the fact that Kobe did not have a prenuptial agreement in place. In financial planning, clients are taught to protect themselves against the 3Ds (Disease, Death or Divorce) as they are the surest ways to financial ruin. For celebrities, Divorce is the main culprit and this Bryant case is bound to be costly.

First of all, Kobe is one of the highest basketball players in the league and according to Forbes, he racked in $53 million last year with $28 million in off-court earnings. His net-worth is estimated to be in the $300 million range and he is still owed almost $80 million by the Lakers over the next 3 years. Given Kobe’s age (33 year old) his earning potential could be in the several hundred million over the next few years.

In the absence of a prenup and based on the state of California community property laws, Vanessa could be entitled to upwards of $150 million. The question now is, should she be entitled to that much? A supportive wife is an invaluable asset to any successful man, but Kobe was already established by the time they met. After 10 years of marriage and two children, the numbers amount to $15 million a year or $75 million per child. How much of Kobe’s wealth should be attributed to his wife? We may never know but I doubt that her contributions outweigh or even equal his. His own drive, determination and basic raw talent led him to where he is.

The future will tell how much Vanessa eventually ends up with and if they even go through with the divorce. The sad part is that all this potential drama could have been avoided had Kobe listened to his father and signed a prenup. This is an expensive lesson to be learned and hopefully other wealthy individuals will learn from his mistake. Marriage is a lovely institution but over 50% of unions end in divorce. Wouldn’t it make sense to insure a fair level of protection for the wealthy party just in case? After all, we take the time to insure our vehicles even though we may never have an accident. We insure our homes even though we might never be the victim of a break-in or a fire. So with odds of a divorce at 1 out of 2, this should be a no-brainer.