Although the passing of a loved one and the dissolution of a marriage are deeply personal experiences, they inevitably raise questions for the broader community when they occur in the lives of some of the wealthiest people in the world.
Such was the case as the Seattle tech industry mourned the death of Microsoft co-founder Paul Allen in October. It was also the case Wednesday morning when Amazon CEO Jeff Bezos announced that he and his wife of 25 years, MacKenzie Bezos, plan to divorce.
The two events promise to put billions of dollars in the hands of two relatively low-profile people. Between the two, a little under $100 billion of net worth is left with a more uncertain and unpredictable future. Particularly given the philanthropic pursuits of both tech moguls, the implications could be significant for Seattle.
Paul Allen left his sister Jody Allen in charge of his $26 billion fortune and wide-ranging business and philanthropic endeavors. Allen signed The Giving Pledge, meaning that at least half of his money is earmarked for charity. The remainder will likely fund his myriad projects through his investment company Vulcan.
But the future of the Bezos fortune is less certain. Washington state law entitles spouses to half of any assets accrued during the marriage. Since the couple was already together when Jeff Bezos had the idea for Amazon — and in fact moved to Seattle together to start the company — it’s safe to say that MacKenzie Bezos has a good case for 50 percent.
Jeff Bezos’ current net worth is $136 billion, meaning MacKenzie Bezos could be entitled to some $68 billion. That would make her the world’s richest woman by a landslide. That title is currently held by L’Oreal heiress Francoise Bettencourt Meyers, according to Bloomberg.
“There could be reasons why a court would say it is reasonable to give her more than 50 percent,” said Michael Fancher, a managing partner with Seattle Divorce Services. “My guess is there’s so much there that it might well be 50 percent but that’s one of the things the court has a lot of discretion about in terms of saying what is equitable overall.”
Of course, not all of Jeff Bezos’ assets are easily split. Much of his wealth is tied up in Amazon stock. As a public company, big transfers of shares could require board approval. Fancher said that typically the court will require the stockholder to liquidate shares in order to split the value with a spouse. But due to the ever-increasing value of Amazon stock, it’s possible the couple will privately work out an agreement that allows MacKenzie Bezos to hold onto shares.
“They could decide that they’re going to liquidate a lot of stock to give to her,” he said. “If the board won’t approve a transfer, maybe there’s an agreement that he continues to hold stock in her name or on her behalf.”
In the divorce announcement, Jeff Bezos said he and MacKenzie “see wonderful futures ahead as parents, friends, partners in ventures and projects, and as individuals pursuing ventures and adventures.” That commitment could mean the two have already worked out an agreement that allows them to avoid going through courts, which can be trying for such public figures.
— Jeff Bezos (@JeffBezos) January 9, 2019
“It’s certainly possible that they’ve done that,” Fancher said. “It’s also possible that they’re going to be negotiating outside of court … a couple like that does have a strong interest in keeping things out of court.”
Whatever arrangement the two make for ongoing financial support will also impact the upfront percentage of the fortune that MacKenzie Bezos receives.
“The court basically has two tools for leveling the playing field between parties: support and property division and so to the extent that it does a lot of one, there’s less of a need for the other,” Fancher said.
The duration of the proceedings and outcome largely depends on how much has already been decided between Jeff and MacKenzie Bezos, according to Fancher. If attorneys need to untangle complicated webs of finances and spend long hours on discovery, fees could amount to several million dollars. But if the two already have an arrangement hammered out, they could each spend as little as $25,000-$50,000, Fancer said.
“A large money divorce is surprisingly like any other divorce,” he added. “They’re arguing on a bigger plane but a lot of the same issues.”