By now you probably know that Jeff and MacKenzie Bezos are getting a divorce and that billions of dollars worth of Amazon stock hang in the balance. What you might not know is a divorce lawyers perspective. Our managing attorney, Jason Martin, wanted to shed some light on the likely steps the Bezos family will take in their separation and some of the hang-ups that come along with dividing a fortune of over one hundred billion dollars.
As a family lawyer, what were your immediate thoughts when you heard the news?
Anytime an uber-wealthy couple gets divorced, my first thought is whether there is a prenuptial agreement. It seems like a no-brainer for one of the richest couples in the world to have a prenup, but there are many reasons why they may have chosen not to have one. For instance, if the couple amassed their fortune during the marriage, then a prenup may not have been necessary at the time of marriage if they had very few assets. I am sure that Jeff Bezos did not imagine he could turn his startup into the juggernaut that it is today.
What is the first thing you would do if your client came to you with this many assets?
Whether a client has many assets or few assets, an inventory of those assets must be created to determine how the assets will be divided. Pennsylvania laws require marital assets to be divided equitably and as such, it is necessary to determine when the assets were acquired, the value of the assets when they were acquired and the current value of the assets.
What are some complications you would anticipate in a such a high-profile high-net worth divorce?
I would expect the couple to want to keep the divorce process away from the public. The press will probably stalk the courthouse to review documents that are filed in the case. The conduct of the Jeff and Mackenzie will be highly scrutinized and they certainly do not want their marital differences to impact the company and the value of the stock.
In this particular case, (a lot of) Amazon stock is expected to be split between Jeff and Mackenzie. According to Forbes, Jeff currently owns 16% of Amazon’s shares, so the divorce could potentially affect how Amazon does business. How might this divorce affect Amazon the company? How are business assets like this typically handled in a divorce in your state?
As regards to Amazon, I would expect that Jeff and Mackenzie will continue fulfilling their roles and conducting themselves in the same manner as they did prior to the divorce. They both have incentive to not allow their divorce to interfere with the business.
Besides the money, property, and financial assets, what else do the Bezos’ need to agree on before the divorce can be finalized?
If there are children from the marriage, then of course the Bezos’ will want to have a custody agreement in place at some point. I would also expect that any post-nuptial agreement will have terms that will require both parties to keep matters confidential and to not disparage one another. They should do everything they can to keep their personal lives private.
Washington state is a Community Property state, so in theory, all the assets between the couple are split 50/50 in a divorce. Is it different in your state? If it’s different, what makes it different?
In Pennsylvania, marital assets are divided equitably. There are many factors that courts consider when determining an equitable division such as the standard of living established during the marriage, the length of the marriage, and the economic circumstances of each party at the time of the division of the property.
How long would you estimate this divorce process to take?
Good question. Even assuming the parties are proceeding amicably, there will be a significant delay in the divorce because all of the assets must be inventoried and valued. This may require valuation experts and forensic accountants. There will also be complexities inherent with the division of the corporate stock, especially if the stock translates into voting rights and control over the company. This may require intervention by the Amazon Board of Directors. If the parties are not proceeding amicably, then there will be a series of Court appearances which will also delay the process.