When Prenup Agreements Work in Your Favour
Case Study | Kevin Costner Divorce
Actor Kevin Costner, 68 and his former wife Christine Baumgartner, 49, married in 2004. Christine filed for divorce on May 1 2023, after 18 years of marriage – citing ‘irreconcilable differences’. The pair have three children together; Cayden 16, Hayes, 14, and Grace, 13.
The pair are now locked in a battle over their assets and child support.
The case study raises important questions on the validity and enforceability of prenups and the subsequent legal implications;
The couple’s prenuptial agreement from 2004 requires Baumgartner to leave the property if they should separate, while giving her access to a $1.2 million fund to find a new house.
Costner has deposited $1.5 million in Baumgartner’s bank account to get her to move out of his mansion, and he said he had given her $200,000 earlier in their marriage in line with their prenuptial agreement.A preliminary move to get Costner’s ex out of their $145million house indicates that the judge may agree that the rest of the document is also valid.
Costner was reportedly ordered to pay his ex-wife $129,000 in monthly child support (which is double what he initially offered to give her).
To add to matters, Costner’s lawyers have claimed that Baumgartner has avoided answering questions throughout the discovery process and that she claims not to understand certain words such as “understood” or “negotiation”, and therefore cannot answer them. Costner’s legal team also claims Baumgartner has avoided answering whether or not she understood the Prenup agreement before she signed it, and branded her legal strategy “gamesmanship of the worst sort”*.
*Gamesmanship in a lawsuit refers to the aim of creating additional expense or stress for the other party in order to persuade them to abandon their case or settle on more favourable terms.
Costner’s lawyers quoted the agreement in legal documents filed in June, saying:
“If Baumgartner, in any manner, challenges or assists in the challenge of the validity or enforceability of any provision of this Agreement, she shall lose any and all rights to receive any payment, Property or Interest from Costner pursuant to this Agreement.”
Director Ciara Brolly’s Assessment & Advice
While pre-nups are intended to provide a clear framework for property division and protect the interests of both parties, challenges can arise during divorce proceedings. This high profile case serves as a reminder that the enforceability of prenups is subject to legal scrutiny and the courts play a crucial role in determining the validity of the agreement.
Costner’s compliance with the agreement so far reinforces his intent that the agreement stands. It will be interesting to find out whether the acceptance of the initial payments by Baumgartner renders her non-compliance and defence that she did not “understand” a non-starter.
I suspect Baumgartner’s legal team may challenge the enforceability of the prenup by claiming duress or coercion and they could argue the terms are justly unfair and do not meet her needs. If the Court finds in her favour, Costner’s vast wealth will be at risk and he faces a repeat of what he went through divorcing his first wife.
Following her July 28 move from the main home, the mother-of-three has been staying ‘at a smaller house’ on the property that had been used for staffers. Baumgartner had been ‘staying in the area to not disrupt’ her and Costner’s three children – Cayden 16, Hayes, 14, and Grace, 13 – who ‘will be back at school in the fall with their friends’ next month.
Allegedly Baumgartner hasn’t touched the money Costner deposited ($1.5 million), as she says doing so would rob her of her ability to contest the prenup’s validity.
Even with Costner’s offered $1.5million, with California’s elevated home prices, and particularly if Baumgartner tries to relocate closer to Costner for the children’s routine sake, she may have difficulty finding something similar to the home (and luxury) she and her children are accustomed to.
Last month, a judge ruled Baumgartner must confer with Costner before taking any property from the estate. She has been barred from taking art, furniture, furnishings or appliances with her, without his explicit consent.
Allegedly, Baumgartner previously requested that a judge order Costner to pay $248k per month, as well as 100 per cent of their three teenage children’s private tuition, healthcare expenses and extracurricular activities. She reportedly argued that the amount was less than what was needed to “maintain the children in their accustomed lifestyle”.
[Costner was reportedly ordered to pay his ex-wife $129,000 in monthly child support, which is double what he initially offered to give her.]
Associate Shannon McLorie’s Assessment & Advice
Given that Baumgartner intends to challenge the validity of the prenuptial agreement, she has good reasoning not to accept the relocation monies. Using the money to rehouse herself would arguably suggest one’s acceptance of the purpose of the money and in turn, an acceptance of the terms held within the prenuptial agreement.
Baumgartner’s point in not wanting to disrupt the children and relocate outside of their school area is entirely valid and something the Court would likely consider. When a prenup agreement is being relied upon, the Court will want to ensure the consequences of holding the couple to this agreement will not put either one of them, or more importantly a child, in a position of grave financial hardship, the Court may decide to deviate from the terms slightly as it relates to the children but it will not disregard the terms of the prenup altogether.
Whilst it could be argued that Baumgartner is not in a position of grave financial hardship, she is not in a position to provide the same lifestyle the children are accustomed to and indeed, she has outlined she is not in a position to purchase housing in close proximity to the children’s school. Depending on the outcome of the hearing on the validity of the agreement, the Court may order additional spousal maintenance payments for Baumgartner to assist her in maintaining a lifestyle she has become accustomed to.
As it stands, Costner is continuing to maintain Baumgartner (paying her credit card bills etc) which may be her motivation in delaying the process.
Valuable items are often referred to in prenuptial agreements, and their split division upon any separation or divorce however arguing over pots and pans is not something the Courts typically entertain.
When there is a clear disparity between two Parties’ incomes, the court will likely award spousal maintenance in addition to child maintenance. I believe this to be more likely given Costner’s wealth and the standard of living Baumgartner appears to have become accustomed to.
I believe the best outcome for Baumgartner would be for the agreement to be overturned on the basis the terms are unfair and do not meet her or the children’s needs. This however does beg the question why she never sought to review the agreement and enter into a post nuptial agreement in the 18 years of the marriage.
Why you should consider a PreNup or PostNup Agreement?
Prenup Agreement terms can be varied in favour of children
It is interesting to note the recent ruling in MN v AN, 2023 EWHC 613 Fam when weighing up what view the Court might take in this jurisdiction; whilst largely upholding the prenup agreement the judge did vary the terms citing the needs of the children. However, by upholding the pre-nup -thereby dismissing the wife’s claims of duress and unfairness this would offer some hope to the Costner’s of this jurisdiction.
Prenups are not just for millionaires
Remember prenups are not just for millionaires. With any couple bringing high net worth assets to the table it’s important to know what’s at stake if the relationship breaks down. Protecting your finances with a prenuptial agreement is the best way of ensuring your financial security.
Review your terms – especially where children are concerned
It is hard to imagine that any agreement made 18 years prior and before the birth of any children or following any other milestone in the marriage will take precedence over any legal remedy available in divorce.
Don’t become complacent and forget to review the terms. This is more important when children are born and you have to consider their needs as well as your own or when one party acquires an asset not dealt with in the original prenup.