A recent case that hit the headlines has revealed some fascinating insights on high net worth divorces.
What looks to be the largest divorce settlement in history, worth at least £27billion, has been agreed between Amazon founder, chairman and CEO Jeff Bezos and his wife MacKenzie. Mr Bezos will retain 75% of his stake in Amazon under the agreement and will likely still preserve his position as the world’s richest person, with Ms Bezos’s share of the settlement likely to make her one of the 3 richest women in the world.
Amazon was founded by Mr Bezos a year into the couple’s marriage, and was famously initially operated out of the garage of their house. Ms Bezos was one of the first employees of the company.
Ms Bezos will be giving up all of her voting rights in Amazon to Mr Bezos, which means that he will retain a controlling stake in the company. This will likely work to the benefit of both parties, as Mr Bezos can continue to manage Amazon effectively, and Ms Bezos will reap the financial benefit from this work as her shares will likely increase in value. Amazon is consistently placed as one of the most valuable companies in the world.
Much of the rest of the agreement between Mr and Mrs Bezos will remain private. The details of how their divorce affects their shareholdings in Amazon has only become public knowledge due to company filings that Amazon are required to make.
The state of Washington treats wealth earned in the marriage as belonging to both parties, and therefore assets can be claimed by either party upon divorce, which is similar to how the court in England and Wales treats matrimonial assets. This generally leads to court decisions and settlements where assets acquired in the marriage are divided between the parties on a roughly 50/50 basis. However courts will usually approve private agreements, in which parties can decide how to divide their assets however they so choose, as it appears has happened in the Bezos’s case.
The Family team at Brabners has a vast amount of experience in dealing with high net worth individuals going through a divorce. If you have any queries in relation to this topic or are looking for some advice, please do not hesitate to contact Leanne Instrall or a member of the Family team.
