Over the past few years, there have been several headline making divorces, including 2 of the most successful American business leaders and innovators, Jeff Bezos and Bill Gates. These business moguls went through fairly public divorces, with many spectators watching, mostly due to the massive fortunes that were involved in these high asset divorces.
Jeff Bezos and his wife, MacKenzie, were married for 25 years and are parents to 4 children. MacKenzie left the marriage, becoming one of the wealthiest women in the world, thanks in large part to her receipt of over $38 Billion in Amazon Stock in the divorce settlement. Microsoft founder, Bill Gates and his wife, Melinda, divorced in 2021, and Melinda exited with over $76 Billion. These high-asset divorces involved staggering amounts of money. This is not typical of every divorce, but both of these high profile cases can illustrate some of the issues that surround high-asset or executive divorce.
Public vs Private
Both of the aforementioned divorces were very public, and the public disclosure of very private information is something that can happen in any divorce case. A divorce lawsuit is a matter of public record, and anyone can access a court file and read the file’s contents. And, when a case is interesting and involves public figures, there is an even greater chance that someone or some news entity may report on the matter. In reality, there are very few legal matters that are sealed or kept confidential – adoptions, juvenile records and competency matters are some of the few exceptions.
One way that a divorcing couple can maintain some privacy is by settling their matter via a separation agreement or mediated settlement, regardless of the size of the estate. However, if a couple is forced to have their matter heard by a judge, anyone may walk into the courtroom and observe; a court file can be read by anyone as well. Files can also be accessed electronically, making “file reading” easy to do without even so much as a trip to the courthouse.
What is involved in the average high asset divorce?
High asset divorces where there are not billions on the tables may still involve the division of a complicated property portfolio. Marital property needs to be divided, and part of that property may include retirement monies, vested assets and stocks, stock options, business interests, deferred income, intellectual property, and luxury items. If one spouse is a business owner, the business may need to be evaluated and appraised. A careful review of company business records is needed, along with valuing things like a company car, working expenses, bonuses, and incentives. A forensic accountant may be needed to review personal and business expenses and incomes. Personal and business tax returns need to be studied. Value will need to be placed on the use of a company car, air miles, and other related expenses.
Having a successful business may be part of the problem with a failing marriage. It is often noted that a demanding work schedule can be the source of martial discord. The spouse who is at home more may find it difficult to overcome the resentment that comes into play when one spouse is never home to help with the children and household chores. Likewise, these same time pressures may not work well for a parent who is divorcing but wants to spend some time with his or children while still trying to manage work’s demands. A boss in the workplace may know that his or her word is what will rule in the office, but that might not be true at home. Also, some business owners and executives may find that they are never really off the clock. They are working 24/7, spending hours at night and on weekends talking about business, making deals, and networking.
What else to expect
Divorce is an extremely emotional burden and one’s work performance might be impacted in a negative way. Divorce professionals encourage bosses and executives to share with their employees that they are undergoing a divorce so that employees may be informed but also be aware of what is happening. When the CEO of Best Buy was going through a divorce, he sold over 300,000 shares of stock, causing stockholders to be concerned over the business. Those fears were somewhat alleviated when it was made public that he sold the stock to have liquidity to fund his divorce. Employees don’t necessarily need to know everything, but the real reason for a stock sale will help reduce some financial future concerns for employees and financial backers.
A business executive may taut his or her strong negotiation skills when it comes to business matters. However, most divorce experts do note that hard ball business negotiating skills do not necessarily translate well into divorce negotiations. Hard line bargaining typically comes off as close to bullying in divorce negotiations, including but perhaps especially in high asset divorces. It does not bode well if a parent just walks out of custody mediation or talks.
A well drafted pre-nuptial agreement might resolve some of the divorce negotiations. If you are already married, it is sadly too late for a pre-nup, but they should absolutely be considered for any future marriages. Jeff Bezos’ former wife has already been through her second divorce. It is common knowledge that she entered into her second marriage with her strong pre-nup that was written to protect her billions and Amazon interests after helping co-found the company.
On the other hand, the spouse who is leaving the business owner or executive, needs to carefully consider all the compensation that the other spouse receives. There may be assets like a company car, phone or laptop that is included in their spouse’s compensation plan. The value of those assets needs to be monetized when calculating spousal support and child support.
Good, successful business decisions make take time to make-the same is true for divorce decisions as well.
Lisa has practiced law since 1987 but has also been heavily involved in legal education and writing. As a teacher at Central Carolina Community College, she has been nominated twice for Instructor of the Year. She has taught paralegal and criminal justice courses, authored legal study guides and articles for national publications, edited numerous legal studies textbooks, and consulted with legal authors on several writing and educational projects. She is also a Board member and Committee Chair for the North Carolina State Bar Board of Paralegal Certification.
