If you’re too drunk to get married, you’re in no condition to manage your own accounts. And the future doesn’t look good for the next generation.
Nic Cage just got married again in Las Vegas. He wants an annulment. We’ll see how much it costs him this time.
After all, he’s burned through at least $150 million in career earnings paying alimony and the IRS for badly filed returns, not to mention flipping mansions he didn’t need.
It’s a professional disgrace. With that much cash flowing, he deserves a lot of high-grade management expertise.
That’s why it’s practically ridiculous to see Cage once again gambling the money he has left on the mercy of the next divorce lawyer who comes around.
Getting married again without the proper protective legal framework in place was stupid. Begging to have the relationship annulled because he was too drunk to think properly might be honest, but it doesn’t address the real problem.
After all, an investment advisor presented with that pool of career wealth could easily charge $2 million a year in fees or double that in hedge fund circles.
And conventional Hollywood talent managers might easily have taken $40 million over the decades as payment for keeping the star on track.
That’s enough money to motivate his people to do what it takes. Theoretically it should motivate a superhuman effort.
But if the principal goes off the rails, there isn’t a lot they can do but clean up the spill as fast and as well as humanly possible.
When the client can’t be trusted
Cage evidently went against their advice or had no advice when he filled out that marriage license on what amounts to a whim.
It apparently surprised his new bride as well. He’s on tape repeatedly asserting that she didn’t pressure him, that this was something he wanted.
A week later, he either changed his mind or someone in his organization convinced him that he didn’t actually want to get married after all.
Suddenly he was too drunk to make an important decision on his own. Admittedly he looks a little disoriented in the video footage, but it highlights the risk of letting him out unsupervised at all times.
We know that his previous manager claims he consistently went against all recommendations, even if it meant running up tax bills he couldn’t pay.
Before that, his wild marriages crippled his finances. The issue wasn’t that he was marrying the wrong people but that every detail in the way he went about it was wrong.
There were never any prenuptial contracts to ensure that what he brought into the relationship would remain his. He didn’t have any asset protection trusts in place to shield himself from a bad split.
And when he had to pay the divorce settlement, he wasn’t liquid. Too much of the money was sunk into eccentric real estate and comic books that he had to sell at a loss to raise cash.
Forced liquidation is never fun and it’s rarely the best option if anything else is available.
With Cage, nothing better was available. He’d taken everything smarter off the table.
The massive IRS bills were a similar story: nobody filed in the first place, so when they came looking to get paid, only liquidating a few mansions at a huge loss would resolve the situation.
The entire planning process revolves around making sure resources are available when needed and that they’re working hard in the meantime.
Either Cage’s people failed to plan or he didn’t take their advice. If they wanted the relationship to succeed, they needed to plan around him, making sure that they were covered if, for example, he decided to get married in Vegas.
You can’t get every girlfriend to sign a prenuptial contract in advance like a non-disclosure agreement. The solution was really to move the liquid assets into a trust early on and pay the star a stipend from it.
The right trust would’ve been immune to any divorce decree and it would’ve paid its own taxes like clockwork. Meanwhile Cage would’ve gotten an allowance to burn as he saw fit.
Got a girlfriend? No problem. Lavish her with treats and even get married. The money remains safe in the trust.
With enough planning, the trust could even get paid for his movie roles. Residual rights and advance income would have bypassed him and his foibles completely.
Of course the ideal time to do that was at the beginning. But the next best time to start is always right now. After any divorce, take what’s left and lock it up to prevent repeat disasters. The same with every cash crunch.
The next generation looms
Whoever is running the Cage show knows now that he’s a little erratic. The solution is simple: give him just enough financial rope to have fun with and keep the rest behind the scenes.
That’s what he does with his own son, who gets $16,000 a month from dad for whatever he needs. He just got a divorce too and now his ex-wife can claim half of that income.
Like father, like son? It’s not an ideal dynastic structure because when dad is gone, his kids don’t have his earning power to fall back on.
They’re left with whatever he leaves behind. And the family’s advisors are left with a diminishing pool of capital to work with.
Supposedly Cage has about $25 million now. If the annulment strategy pays off, he’ll keep most of that, maybe minus a few extra gifts to the once-and-maybe-future girlfriend.
But if she fights for a better settlement, he could be out another $12 million plus legal fees. What stays behind is still real money, but it’s not going to buy a lot of mansions for the kids.
And we can’t count on an ironclad estate plan here either. The advisors may have talked about trusts and the importance of bypassing estate tax.
Cage is 55. One of these days we’ll see if he actually listened or simply followed his usual habits of doing what he wants to do, never mind the financial consequences.