Can Tom Cruise Teach Us About Divorce?

We all know divorce can be a costly process no matter where you are financially in your life.   With the recent break up of Tom Cruise and Katie Holmes, there is another Paparazzi story brewing on how much it will cost Mr. Mission Impossible to make this divorce possible.   Famous comedian and movie star Robin Williams once said, “I believe the word divorce comes from the Latin for a man having his genitals ripped out from his wallet.” (source:    So what smart money moves can we learn from the third divorce Tom Cruise is going through with Katie Holmes?  Well, here are four financial ideas to potentially help you if you have to go through separating your assets in a divorce?

  • Try To Minimize Legal Fees – Going through a divorce will be hard enough on you emotionally.   If you and your ex can maintain a reasonably amicable relationship, you could save more than 50% of your legal costs by doing a collaborative divorce.    This type of process doesn’t have to rabid lawyers sitting across the table from each other, but instead uses cooperation rather than confrontation.   If this doesn’t work, then you could look at mediation before you get the high powered attorney batting it out for you while they decrease your net worth by the hour.  It seems Tom Cruise has been able to do more low profile quickie divorces over the years.


  • Keep A Low Profile– Tom Cruise’s religious beliefs of Scientology have been examined with a fine tooth comb over the years.   Even though divorce can cost a lot of money, maintaining a relatively low profile can keep your overall costs down.     Even if you aren’t a movie star, you don’t want to put yourself in a position where the Paparazzi can have pictures of your or dig up other information that can cost you even more money.    By working hard to quickly settle the financial matters with Katie Holmes out of the light of Paparazzi, Cruise will stand a better chance to keep his costs lower than a battle fought in the media.   Getting a confidentiality clause can be a good idea so information after the fact doesn’t hit the local media.


  • Discuss your real estate options– Real estate can be one of the trickiest items to discuss between a couple going through a divorce.    Whether you own one home or multiple homes, you need to take a close look to see whether your home(s) are under water or there can actually be money made on the sale of a home.   Since ex’s generally want to start fresh and get into new living spaces, the cost of selling one home and potentially buying two new ones can really decrease the overall net worth of your family.    It’s important to have cooler heads prevail and think about the short and long term ramifications of home value, school systems (if kids are involved), moving costs, and other potential ancillary expenses.


  • Maintain the right insurance–   I’m not sure how Tom Cruise and Katie Holmes will handle this own, but I highly recommend that discussions are entertained on how much life insurance each spouse will have on each other after the divorce.    I recommend that each spouse is the owner of the policy on their ex so they can be sure it can’t be changed and premiums are paid.    This is often overlooked because there is so much focus on the asset base, and each spouse should want this in place especially if there could be a second (or third) marriage down the road.   A close examination of the health insurance situation should happen as well to ensure the kids are on the best possible medical coverage depending on which spouse carried the health insurance.

We see these high profile stories every day in Hollywood waiting to hear about the large settlements such as the Mel Gibson case where he lost half of his reported $850 million dollar net worth.   We aren’t all as lucky to have that type of wealth, so it’s important you start grasping some of the new rules of divorce.   Couples in Hollywood seem to come and go as fast as a new movie being released on DVD.    While Tom Cruise hasn’t made ‘all the right moves’, he certainly can teach us something about being a ‘top gun’ when it comes to making a smooth financial transition through a divorce.     These smart money moves may help you if this situation happens to you at some point in your life and good luck making the divorce mission possible!

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder of oXYGen Financial, Inc – The Leaders in Gen X & Y Financial Advice and Services

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves


My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Read More About Ted Here

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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