When The World’s Richest Couple Divorces

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As many have probably heard, Jeff Bezos – founder and CEO of Amazon and richest man in the world – and his wife MacKenzie are divorcing. Given an estimated wealth of $137 billion dollars – a sum greater than the gross national product of most countries – one might think this will be a complicated divorce. The answer is yes and no.

The Bezos live in Washington state, which is one of nine community property states. What does that mean? In a community property state, all assets acquired during the marriage (and all debts) are deemed the joint property of the spouses and must be divided equally. Unlike Missouri, where misconduct can result in an inequitable division of property, Washington simply takes the marital pie and cuts it in half.

We also know that the Bezos do not have a prenuptial agreement.

These facts alone have led some to wonder about the future control of Amazon, the main asset of the Bezos estate. Since Amazon started after the Bezos’ marriage, all of the stock acquired during the marriage is considered community property and therefore subject to the equal division rule. As a result, some worry that MacKenzie could now fight Jeff for control of the company.

This seems an unlikely outcome. First, Jeff may have had MacKenzie execute agreements that vest control of the stock in his name, or at least that she remains a passive investor. Second, if the first option is not true, Jeff will likely be (or has probably already been) taking steps to secure his control of the company. An army of lawyers have in all likelihood been working on a settlement agreement that will exchange assets for controlling interest in the company so that Jeff remains the primary stockholder and officer (though MacKenzie probably will have the second largest share in the company). Finally, despite how the marriage has ended, MacKenzie will not want to see Amazon stock tank because of their divorce – that will hit her right in the pocketbook. As far as Amazon goes, the Bezos’ interests are still aligned.

Despite the taudry stories that have detailed the affair Jeff had with a married woman that seems to have contributed to the divorce, none of that will actually matter because of the community property laws. Had this taken place in Missouri, other factors like marital misconduct could be considered in distributing the marital property and would have made the litigation potentially more complicated. Community property states sacrifice full equity in all situations for clarity. Given that only nine states are community property states, it seems that approach still has not appealed to the majority of Americans.

No one need shed a tear for either Bezos spouse – half of $137 billion dollars is still more than the gross national product of most countries.

If you have questions about property distribution and divorce, contact us – we can help.

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