Earlier this year, it was announced that Jeff Bezos and his wife MacKenzie were to divorce after 25 years of marriage. Speculation began about how the fortune of Amazon founder Jeff, the world’s richest man, would be treated on divorce and just how much his wife MacKenzie would stand to receive.
The couple have now finalised their divorce and matrimonial settlement – with Jeff Bezos handing over a 4% stake of Amazon to his former wife MacKenzie, worth $38bn (£29bn).
Although this figure makes the Bezos divorce settlement the largest in history, had the couple been married in the UK, the settlement would arguably have been even larger. This is because Jeff and MacKenzie Bezos were married in 1993, a year before Jeff started Amazon from his garage in Seattle. As the starting point for divorce in the UK courts is a 50/50 split of any assets that have been acquired throughout the course of the marriage, the business would most likely have been treated as a matrimonial asset in the UK.
Due to this feature of UK divorce, the process of determining what should and what shouldn’t be deemed matrimonial assets can sometimes become acrimonious.
Here are some of the other special considerations involved with high net worth divorces…
Business shares
Businesses are often the largest consideration when it comes to high net worth divorce cases and putting a value on a business and therefore calculating an individual’s interest in it is often one of the most time-consuming areas of such divorces. Even where a valuation is agreed between the parties, or is determined by the courts, distribute this isn’t always straightforward. In the majority of cases, the retaining shareholder will need to raise funds to buy out their spouse’s share. Although a business is by no means protected in divorce settlements, forcing the closure or sale of a business is often not in the best ongoing interests of either party, so will always be a last resort.
Property
Property is usually another significant asset involved in high net worth divorces, with couples sometime having several homes in various different countries around the world. Achieving a fair valuation of each property can be difficult to agree and is determined by the housing market at any particular time, with the added complication of fluctuating currency exchange rates.
Non-disclosure
Due to the financial stakes being so high in divorces involving significant wealth, it is not uncommon for one or other spouse to refuse to make full and frank disclosure of their financial position in an attempt to gain a financial advantage. Although attempting to hide asses is illegal, it often still goes on in high net worth cases where due to the sheer number of assets and the complex structures that are often involved making it easier to go amiss.
Definition of ‘needs’
Successful couples with significant wealth will often have enjoyed a very high standard of living during their marriage. Where this has been sustained for several years, it is likely that upon divorce, the ongoing financial ‘needs’ of the parties will likely be calculated in a more generous way than in an ordinary divorce case. The financial needs of each party will usually be met from matrimonial assets although where the needs of the other spouse or any of the children of the family cannot be met from the parties’ matrimonial property alone, it may be necessary for non-matrimonial assets to be brought into the divorce.
Pensions and investments
Any individual that has amassed wealth is likely to have proportioned some of this to pensions and investments. Pension wealth is thought to often go unconsidered in UK divorce settlements – despite the fact that these can amount to a significant pot of wealth. High net worth divorces often involve trusts, which again can account for significant amounts of wealth. Where a trust is located in England and Wales, a request can be made to the trustees for full disclosure. However, where trusts are based overseas, this may not be so straightforward.
With all of these factors in play, it perhaps isn’t surprising that high net worth divorces can quickly become extremely complex.
Anthony Jones is a Director, Head of Family and is a Resolution Accredited Specialist. Anthony has experience in representing business owners and the spouses of business owners, along with other high net worth individuals, in divorce cases.
For more information, please contact him on 0161 641 4555 or email anthony@odonnellsolicitors.co.uk
