The World’s Largest Divorce Settlement

Amazon founder Jeff Bezos and his wife of 25 years MacKenzie are officially divorced. The parties reached a settlement agreement which was finalized by a Seattle judge last week. Jeff Bezos has an estimated net worth of $159.5 billion, making him the richest man in the world. Luckily for him, he retains that title after his divorce.

Washington is a community property state in which all assets acquired throughout the marriage are considered joint property and are divided roughly 50/50 between spouses, regardless of who earned the money or acquired the assets. This includes income, real estate furniture, stocks, retirement accounts, cars, etc.

In contrast, North Carolina is NOT a community property state. Instead, North Carolina utilizes the concept of “equitable distribution” of marital property, considering a number of factors to determine how the property should be divided. For example, the parent with primary physical custody of the child is more likely to be granted the house. In Washington, however, the house would likely be sold and the revenue distributed equally.

Whether in Washington or North Carolina, a prenuptial agreement has the ability to alter the status quo. If the parties signed a prenuptial agreement in which they agree to split the assets in a different way than prescribed by state law, the agreement controls, provided it is valid and enforceable. In this case, Jeff and MacKenzie Bezos did not sign a prenuptial agreement, meaning MacKenzie was entitled to half of all marital assets.

Almost all of Jeff Bezos’s fortune is tied to stock in his multiple companies, including Amazon and the Washington Post, which posed a few problems. Shares of stock are not liquid, meaning they cannot be converted to cash in a short time with little or no loss of value. Additionally, valuing a company’s nonliquid assets, such as stocks, can be time-consuming. This would lead to a lengthy divorce proceeding that could potentially affect the company’s viability and stockholder control.

Rather than splitting everything 50/50, MacKenzie agreed to the largest divorce settlement in history: a 4% stake in Amazon amounting to about $38 billion making her the third richest woman in the world. MacKenzie granted Jeff voting control over her shares and pledged to donate at least half of her payout to charity.

Contributed by Sydney Reynolds, Legal Intern

Note: Rice Law has experience dividing complex assets including businesses.  Call us for help with your divorce.