Jeff Bezos's $140 Billion Divorce

Unless you have been living under a rock for the last few weeks, you must have heard that the CEO of Amazon, Jeff Bezos, is getting divorced from his wife of 25 years. It is widely reported that it will be the most expensive divorce in history due to one crucial decision; not having a prenuptial agreement. That’s right, no prenup. Was this a mistake? Was it planned? We don’t know. However, if you ever plan on making millions or billions, you probably want to spend a few minutes reading this blog. I am going to look at this issue as if Jeff Bezos were a billionaire Florida resident who is getting divorced without a prenup.

First, we must start from the beginning. The Bezos divorce will be a ridiculously expensive divorce because of two words: marital assets. A marital asset is any asset acquired during the marriage by either spouse, any enhancement of a nonmarital asset (this includes any appreciation in value), gifts between spouses, any vested or non-vested funds including retirement plans, pensions, annuities, and insurance plans, any property held as tenants by the entirety. It doesn’t matter if the property was acquired before or during the marriage. Also, any workers’ compensation or personal injury awarded during the marriage, or any awards for pain and suffering are not subject to distribution. Essentially, Jeff Bezos and his soon to be ex-wife attained most, if not all, of their money and substantial assets after Amazon’s stock exploded. So, most, if not all, assets will be marital assets.

His company was founded in 1994 as an online bookstore. While there may have been visions of grandeur back in the lean times, there could have been no way that he would have known that Amazon would grow to its size today nor that he would eventually split from the love of his life. Even if there are no assets to speak of when a couple does marry, it is still wise and highly recommended that a prenuptial agreement is made and agreed upon prior to the marriage, in case something does happen later that is completely unexpected. That was clearly the case here. The reason this divorce will become so expensive is due to the amount of stock Bezos and his wife own in the company. They are one of the richest couples on Earth due to the amount of stock they own. This stock will eventually have to be split in half (usually half) when the divorce is complete because the court will consider the stock a marital asset as it was obtained during the marriage.

The reason his wife would get either half of the stocks Bezos owns or an equal amount of cash is due to a concept called equitable distribution. Essentially, the court will divide the marital assets in half to be as fair as possible. The court generally considers the following: the contribution of each spouse to the marriage, the economic circumstances of the parties, the duration of the marriage, the interruption of personal careers, the contribution of one spouse to the other’s personal career or education, the desire to retain an asset, the contribution of each spouse to the acquisition, enhancement, or improvement of an asset, the desirability of retaining the marital home, and any waste or destruction of an asset during the marriage. Granted, we may not know all the intricacies of Jeff Bezos and his wife’s relationship, but it is safe to assume that they had a standard of living that we can’t even imagine. If his spouse was not employed outside the home, and she contributed to his or the family wealth in some way, then this would help her cause in obtaining a more favorable share of the assets. Again, based on the previous factors, it would be safe to assume that she will be getting one-half of their combined net worth.

The marital assets are separate from alimony. If she is awarded alimony, any amount she receives will be on top of the equitable distribution of marital assets. She must claim alimony at the very beginning of the divorce case when she filed her petition or answer to the petition for divorce. If she does not, then the court may deem the request for alimony waived. Assuming she did request alimony, the court will only grant alimony based on the need and ability to pay. Jeff Bezos has the ability to pay alimony as well as her need for it. The agreement for the alimony could be in one lump sum or in monthly payments but either way, this will be a large amount of money going her way.

Points of view have been all over the board on this one as it seems everyone who heard about this divorce has an opinion. The important thing to remember is this: No-one goes into a marriage expecting to be divorced one day. I’m sure this couple is no different. You only live once as far as anyone knows. You must be happy. If Jeff or his wife weren’t happy in their marriage, and they decided to end it, that is their business. They both have the resources to know what the cost would be. Had either of them had the foresight to know they would be in this position 25 years later, they could have done some planning. It is wise to consult with an attorney as to how to protect your assets before entering into a marriage. And remember, any agreement must be in writing in order to be valid.