Kim Kardashian filed for divorce from Kanye West on Friday. (Getty)
The Yeezy founder and makeup mogul have a prenuptial agreement in place, reports say
With news that Kim Kardashian filed for divorce from Kanye West on Friday — what is at stake as far as the stars’ fortunes?
Kardashian has hired attorney, Laura Wasser, who has been on the reality star’s retainer since she split from Kris Humphries. The high-profile negotiator, known as the “Disso Queen,” has also represented Angelina Jolie, Britney Spears and Johnny Depp, respectively.
Wasser often presses her clients to negotiate the terms of their splits prior to filing any official paperwork. It has been reported that West and Kardashian have a prenuptial agreement in place and do not plan to contest, so they could avoid splintering their individual fortunes, likely leaving with amounts similar to what they came in with.
Kardashian and West have a gobsmacking fortune amassed between them — not to mention multiple business ventures and properties owned by each party. But having a prenuptial agreement in place means the end of Kardashian’s and West’s nearly seven-year marriage may not become as messy as one would expect.
“What the prenup would likely provide people with their sort of financial situation is that everything that they came to the marriage with – whatever assets they had in their name at that time – they would leave with, and to the extent that they continued to acquire assets or grow their business during the marriage, all of that would be off the table,” Sherri Sharma, a partner at Aronson Mayefsky & Sloan in New York City, previously told Fox Business.
Kardashian’s and West’s prenuptial agreement also likely has kept “all of their sources of income separate, meaning all of the income Kim made stayed with Kim and all of the money Kanye made stayed with him,” David Glass, Los Angeles divorce attorney and former therapist added to Fox Business on Saturday.
Forbes named West a billionaire in April, based on his stake in Yeezy. The 43-year-old rapper had an estimated worth of around $100 million in 2014 when he married Kardashian, 40, whose wealth has also grown significantly in the years since. Kardashian’s fortune went from roughly $30 million that year to an estimated $780 million last year, according to the outlet.
In June 2020, Forbes reported that Kardashian made $49.5 million in 2019, which landed her in the 48th spot on its list of highest celebrity earners.
However, Kardashian will likely see a significant boost to not only her ranking on the coveted highest-earners but her overall net worth, as she recently announced that she has sold a 20% stake in her KKW Beauty line to Coty for $200 million.
The bulk of Kardashian’s wealth comes from her wildly popular cosmetics and fragrance company KKW Beauty, which generated about $100 million in sales in 2019.
The reality TV star also launched her inclusive undergarment brand Skims in 2019, and that asset raised $5 million in venture capital from the firm, Imaginary Ventures. The social media maven could net her up to $1 million for a single social post, in addition to the television and mobile game revenue she brings in.
Together, Kardashian and West are reportedly worth a combined $2.1 billion.
There are some areas a prenuptial agreement does not cover, however.
“In California, a prenup cannot control child custody — who gets to see the kids when — and it cannot control child support either,” Glass explains. “Those issues remain to be decided.”
TMZ obtained documents stating that Kardashian has requested joint legal and physical custody of the couple’s four kids: North, 7, Saint, 5, Chicago, 3, and Psalm, 1.
“This tells me that either they’ve already worked it out or it was never an issue to begin with because if somebody feels that another parent is not capable of having any custody or there are concerns of that person sharing joint custody, you’re going to take a stronger position and ask for sole legal and sole physical,” Raymond Hekmat of Hekmat Law & Mediation, APC, in Beverly Hills tells Fox Business.
According to Us Weekly, Kardashian is also asking the judge to terminate the court’s ability to award spousal support for either party.
West and Kardashian own multiple properties, including a reported $14 million ranch in Cody, Wyo., and a home in Hidden Hills, Calif., which they reportedly purchased for $20 million before spending another $20 million renovating it, according to Business Insider.
In a 2018 interview with radio host and variety content producer, Charlamagne tha God, in which the pair toured West and Kardashian’s recently constructed Southern California abode, the rapper and fashion mogul vowed to “be one of the biggest real estate developers of all time, like what Howard Hughes is to aircraft and what Henry Ford was to cars.”
Per a January report from Page Six, citing a source with intel on the arrangement, Kardashian owns the land their Los Angeles architectural marvel of a home sits on, but West owns the home itself and Kardashian wants it signed over to her — the home has previously been reported to be a point of contention between the two.
TMZ reports that the Hollywood couple is already well along in coming to a property settlement agreement. What happens to their homes and other large assets comes down to whether Kardashian and West have community property.
“Likely in most prenups to the extent that you put a property in joint names – I know they’ve acquired real estate but we don’t know how it’s titled or if it’s held in some sort of an LLC for privacy reasons – but depending on how it’s titled, it could be that certain assets acquired during the marriage would be considered ‘marital property’ in New York and in California, it would be ‘community property’ that would be divided equally,” Sharma explained.
However, in the event that the couple could not come to an agreement on how to offload or divide property, they could be looking at a painstaking process in determining how such a high-valued asset is divested.
“If they have a prenuptial agreement, it will govern how property – regardless of where it is – gets divided and it will simplify it,” Sharma said, adding that “even if they don’t have a prenuptial agreement, what is the most relevant is where the divorce takes place, which in their case would be in California and would mean a 50-50 division of assets.”
Sharma maintained: “That’s another potentially complicating factor because, depending on the nature of the asset, if it’s real estate, for example, if they can’t agree who’s going to keep it and who’s going to buy the other person out, it gets sold. If one of them wants to keep the property, they have to agree on a value. So then they have to get it appraised and that is a whole process that takes time, also.”
Sharma said such instances are common when divorcing couples negotiate the division what would be considered their primary residence in the event they don’t want to displace their children.
As far as Kardashian’s KKW Beauty and Skims shapewear brand, Sharma said the division of those entities would vary based on the terms of a prenuptial agreement and could take into account the value West could have provided if he helped Kardashian launch her companies or consulted Kardashian in any manner.
“This is actually an interesting distinction, I believe, between California and New York,” said the litigator. “But they would be decided the same as all the other assets in California, from my understanding. So in the sense that if the prenup governed it, it would go to Kim because a prenup agreement says every asset in her name is hers, even if it grew.”
Sharma pressed: “Let’s assume that Kanye was involved, since he is also in fashion and perhaps was advising her as she was consulting in some ways – my understanding is typically that can increase the percentage that someone is entitled to. That is the way it would work, at least in some states.”
“And in New York and California, it might be that regardless of what they did – no matter whether he contributed anything at all, he gets half, even if it’s all hers. So that is messy because similar to the real estate we were discussing, he has to be bought out. And with a company, it’s obviously more complicated than real estate so it has to be valued and it would require disclosing lots of financial documents and hiring a valuation expert to put a number on it.”
Sharma also suggested Kardashian could go into a negotiation with West with a game plan that argues her Skims line perhaps isn’t doing so hot given the stout competition in the market and the fact the coronavirus has wreaked havoc on many businesses.
“If Skims isn’t a public company, that makes it much harder to value,” she explained. “If it was a closely held company, they would have to figure out a number and she’d have to pay him out. And he’s going to obviously want it to be a higher number and she’s going to say that the business isn’t doing well at all and there are all these competitors and it’s COVID, etc.”
“She wants to minimize it and they’ll get their own expert and each valuation expert will come in with a different value and then they’ll kind of meet in the middle,” added Sharma.
Glass discussed what could happen if Kardashian wants to drop West’s last name/initial from her KKW beauty brand.
“In California, the court and the law leave it up to the parties to determine whether they’re going to retake their former names. It doesn’t have to be revealed on the petition for dissolution. It can just happen when you reach an agreement,” Glass said.
“The decision whether Kim changes the name of her company is up to her and any shareholders she may have in the company but there’s no way he can force her to keep West or drop West from either her personal name or from her company name,” Glass furthered.
In terms of any debts the couple incurred during the course of their union, those would be considered a liability of the marriage “and typically in a prenup, it would also say that if you personally acquired it, it’s yours,” Sharma said.
“So let’s say she has some debt against her business or something – that would be hers. And then if they owned their house jointly and they have a mortgage – which I’m sure they don’t – but if they did, both of them would have to pay it.”
Hekmat concluded that the fact that divorce between the two has been speculated for quite some time, it’s likely the pair has already made headway on negotiations and the small details.
“What a lot of celebrity’s divorces entail is a lot of orchestration and preparation prior to even filing for divorce. Chances are and my assumption would be when the reports came out that they were meeting with attorneys, they were starting to already negotiate a settlement agreement,” Hekmat said.
TMZ reports that West is not contesting Kardashian’s custody request nor the prenuptial agreement in place. If that rings true, Hekmat said the only thing that could add drama to the divorce at this point is if West were to file an opposing petition.
“If he comes out and files something where he’s asking for spousal support and he’s asking for sole legal, sole physical custody then that would mean they have some things to figure out,” Hekmat said. “But I highly doubt that would happen. His response is probably look exactly like Kim’s petition.”