High-net worth divorce cases making global headlines may not be that uncommon anymore, given the media’s voracious appetite for analysing high-profile and celebrity breakups. As far as high-profile splits go, this one is going to have a huge impact, given that Melinda and Bill Gates’ divorce may turn out to be one of the biggest divorce settlements the world has ever seen. Bill Gates is the world’s fourth richest person and he and his wife of 27 years, Melinda French Gates, run the Bill & Melinda Gates Foundation, which is said to be the largest non-profit organisation of its kind. Together, they are a super-power couple and therefore, the world will be watching.
So, how do you split a pot with $130bn dollars and a whole lot of complicated business interests in it?
Bill and Melinda met in the 1980’s when they were both working for Microsoft. At the time of their meeting, Bill was already the world’s richest man. Melinda was a product manager at Microsoft and they sat next to each other at a business dinner in New York. They went on to get married in Hawaii in 1994 and together, raised three children.
The matrimonial pot now contains numerous commercial interests, including Bill’s remaining shares in Microsoft, as well as shares and investments in a whole host of other industries and companies. There’s also a fair amount of cash, numerous properties (or real estate), private jets, cars and a huge art collection. Their work together (less complicated but equally under the spotlight) at the Bill & Melinda Gates Foundation is likely to continue.
Melinda filed for divorce in May 2021, and at the same time, she filed a Separation Agreement, and invited the court to uphold it. This probably means that their ‘divorce deal’ has already been done. With three sets of lawyers engaged on each side, a lot of thought will have already gone into this arrangement.
Their joint statement said: “We no longer believe we can grow together as a couple in this next phase of our lives.” Their divorce papers simply state: “This marriage is irretrievably broken.” So far, so amicable. Perhaps somewhat surprisingly, it has been reported that Melinda and Bill did not have a pre-nuptial agreement.
Divorce after a long marriage can come as a shock to the outside world, but in fact, it may not be such a shock to the couple themselves. Some couples simply agree that their relationship is over; that they might be happier apart. Though obviously very sad, it is perfectly possible to decide, by agreement, that your marriage is broken and that you can longer find ways to fix it. Some couples choose to follow a separation or divorce process that is entirely in their control. A shared, common goal of ‘dividing equally and fairly’ is becoming the preferred way forward of many couples; not just Melinda and Bill.
Whilst there will be some complexities for Melinda and Bill and their army of lawyers to overcome, the asset split itself may not be much different to any other. As with most divorce settlements: you take a look at what there is, you work out when it was accrued or acquired (before, during or even after separation) and then you work out how best to divide it. Bill is a rich man. He’s still going to be a rich man. Melinda is a rich woman. She is still going to be a rich woman. It’s also likely they will have done a good deal of forward-planning in order to make sure that their children’s inheritance is secure and that their philanthropic work can continue without too much of a hitch.
What is a Separation Agreement?
So, no pre-nup for Melinda and Bill Gates, but instead a separation agreement.
Whilst a pre-nuptial agreement is a legal agreement that couples can sign before they get married, some couples also choose to sign a post-nuptial agreement which is entered into after marriage. This enables a couple to agree the financial division in the event of any future fall-out, although, usually, the couple expect the marriage to continue.. In contrast to this, a separation agreement, is usually entered into when you consider your marriage or relationship to be over. You might want to agree that you are no longer living together, or you might want to agree exactly how to divide your assets and liabilities ahead of issuing an application for divorce.
In the UK, where there is a separation agreement, a solicitor can usually turn this into a financial consent order, as long as both parties are still happy for the agreement to be enforced. The agreement itself is not strictly legally binding, but a court will usually uphold it if it was entered into fairly, if both parties received legal advice, if it has been drafted properly and if your financial circumstances are the same as when you made the agreement.
A separation agreement, therefore assumes that the couple no longer want to be married. Such an agreement, or contract, can be useful if both sides want the divorce to be amicable. Having a separation agreement in place can also take the heat out of ‘negotiating’ at the same time as having to navigate the divorce process itself.
In Melinda and Bill’s case, the separation agreement may have been drafted some time ago. They will have almost certainly agreed on how to divide their assets before filing the divorce paperwork at court and announcing their decision to the world.
If separating by agreement is a way forward that appeals to you, there are plenty of solicitors here at Rayden ready to help you with this. Please do not hesitate to contact us.