Unless your internet has been out this week, you know by now that Bill and Melinda Gates are officially “splitting the sheets”!
This can’t be too surprising given the Bezos divorce last year, but people still seem amazed that such “low profile” billionaires would want to divorce. After all, can’t money buy happiness?
When you get past the reasons for filing the divorce — Bill spent time every year with an old girlfriend (platonic or not), or he was friends with Jeffrey Epstein and Melinda hated it, or whatever else the media can speculate about — the fact is that the really rich really are different.
Unlike the Hollywood divorce, where the high-profile divorce lawyers feed the publicity machine that pours out all the emotional trauma and sexual infidelity of the parties (after all, there is no such thing as bad publicity), that’s not the case here.
The really rich don’t want you knowing their personal business and they don’t want publicity. That’s why the only facts you have in the Gates divorce (much like we got in the Bezos divorce) is from their jointly prepared statement that “we’re divorcing” and “we have a separation agreement.”
I can almost assure you that’s all you’re ever going to get from them. They won’t talk, their divorce attorneys won’t talk, and all the other professionals involved won’t talk.
Bill and Melinda have each hired divorce attorneys in Bellevue, Washington. They are experienced (Melinda’s attorney previously represented Jeff Bezos), have excellent reputations, and are well respected’ but they are not nationally known. They will not be holding press conferences. There are reportedly several divorce attorneys with higher profiles on each party’s legal team and they will not be holding press conferences either.
This divorce will be much like a pre-packaged bankruptcy case. A Decree of Divorce will be presented to the court in early 2022, and it will most likely include by reference an agreed, signed, but unfiled property division setting out all the details of who gets what. And the public will never know.
Washington, like Texas, is a community property state. Texas doesn’t have separation agreements, per se, and I’m unsure under Washington laws whether such an agreement is enforceable by the court.
Texas does have post marital agreements which essentially accomplish the same thing and are enforceable by the court. There could be characterization issues since much or most of Bill’s stock in Microsoft was probably acquired before marriage and thus is his separate property.
The proceeds from the sale of that stock can probably be traced into other assets which would then also be his separate property. But much of that separate property character may have changed over the years with various investments and gifts to individuals and to various trusts. And it’s conceivable that they just decided to ignore characterization issues and just divide everything 50-50 as if it were all community.
Even though there is a separation agreement, it is probably only a general outline of their intentions and most of the details are probably yet to be worked out. While a divorce is a tax-free event, the assets divided all come with different tax consequences – if eventually sold, each asset could have differing tax bases and different tax rates which, in turn, affects how they are valued today.
So, over the next year the business valuation experts, the tax attorneys and the forensic accountants will be busy working out those details.
We will never know the real reason(s) for the divorce or who got what. An extra billion dollars here or there can cover up a lot of fault and insure everyone’s silence. Check your supermarket tabloids for updates, but remember the really rich are really different.
Charlie Hodges is a prominent family lawyer based in Dallas. He specializes in representing business leaders, athletes, lawyers and doctors in divorce-related matters. He can be contacted at charlie@charliehodgeslaw.com.