jeff Bezos and Mackenzie Bezos attend the 2018 vanity fair news photo

How to have a happy divorce - the Bezos way

If there’s one thing that the tabloid media loves, it’s tales of divorces that are ugly affairs: rows, mud slinging, accusations of bad behaviour, children used as pawns, fights over everything from who gets the family pet to what happens to the wedding china.  And overriding everything, the wrangling over money.  So earlier this year, when the news broke that the world’s richest man, Jeff Bezos, and his wife, MacKenzie Bezos, were to divorce, a long-running story of the marital breakdown was anticipated.  But that’s not the path taken by the couple. Yes, they’ve divorced, but, it seems, with mutual respect and zero animosity.

Jeff Bezos and

In case you didn’t know, Bezos founded Amazon, and is reportedly worth $153.1 billion. What’s more, that wealth was built up during his long marriage – 25 years – to MacKenzie, an acclaimed novelist who has four children with Jeff.  She met her future husband while interviewing for a research position at the Manhattan hedge fund where he came up with

Now divorced, MacKenzie is now worth about $36 billion, making her among the richest women on the planet.  Hang on, I hear you say, yes that’s a lot of money but that’s not half of her now ex-husband’s worth, surely.  And you’d be right. But in her divorce statement, she said she was “happy” to give her ex-husband 75% of her Amazon stock and voting control over what she retains, while he takes complete ownership of the Washington Post newspaper and Blue Origin, his rocket venture.

“While we do not operate a community of property regime on divorce in England and Wales, with any long marriage, like that of the Bezos’, the starting point on divorce is an equal division of all the assets between the couple.”

Fiona Wood, partner

The division of assets on divorce

Let’s look at the facts.  When the couple married they had few assets, and their enormous wealth was amassed during their marriage: it is, therefore, matrimonial wealth. It is reported that they married in Washington, which is a “community of property” state, meaning that if a couple divorce the assets the have generated during their marriage should be divided equally between them. While we do not operate a community of property regime on divorce in England and Wales, with any long marriage, like that of the Bezos’, the starting point on divorce is an equal division of all the assets between the couple. There are reasons to depart from equality, such as to meet need, or if assets have been inherited, but the longer the marriage the more likely there is to be an equal division of all the couple’s assets if they divorce.

In early April the couple reported that they had agreed a divorce settlement, which includes MacKenzie retaining 25 percent of their Amazon shares (which is about four percent of the whole company) and Jeff retaining 75 percent, plus all of the voting rights on their total shareholding. MacKenzie is also transferring her shareholdings in the Washington Post and Blue Origin to Jeff. Whilst they have not confirmed how their non company assets are to be divided between them, on the face of it McKenzie is taking significantly less of their total assets, her shareholding in Amazon being reported to be worth $35 billion.

Which brings us back to the question, why is she accepting less than half of the assets? The reason MacKenzie offered up for giving Jeff the voting control over her Amazon shares and her shares in the other companies  was so she would be able to “support his continued contributions with the teams of those incredible companies”.

Divorce and business

One reason migh be liquidity. While the companies may have significant values, that does not mean that Jeff can raise large sums of money through the companies, or elsewhere, to pay his wife a significant capital sum. Raising such sums may have an adverse impact on the companies. Many divorcing couples have companies/businesses that need to be considered on divorce. Often an accountant has to value the business and comment on liquidity, which is the amount of money that can be taken out of the business in order to assist with the payment of a divorce settlement. The tax consequences of this also have to be considered.

Much has been made in the press of Jeff’s alleged adultery, the implication being MacKenzie should obtain a greater divorce settlement because of this, which does not appear to have happened. Under the law in England and Wales this would not entitle someone to a larger financial settlement on divorce. The law states that the reasons for divorce will very rarely have any impact on their financial settlement. (Read more on the subject here.)

Many divorcing couples worry about their futures from a  financial perspective, which, understandably, can increase the tension when trying to negotiate a financial settlement. The Bezos do not have this worry, but that has not stopped other couples in similar circumstances playing out their divorce through the media.

Only the people inside the marriage know the truth, but we can certainly take heart from how the Bezos’ have conducted themselves, in public at least. Their jointly supportive, amicable approach to their split will hopefully benefit them, and their children, for the rest of their lives.


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