Splitting up assets during a divorce can be contentious. Both sides want to fight to get what they feel is fair and due to them. Battling over splitting up assets is normal. Splitting up assets valued at $142 billion is not.
That is the case for Bill and Melinda Gates who announced on May 3rd, 2021 that they are divorcing after 27 years of marriage. The announcement led to many questions about their marriage. Why now? What happened? How long has the divorce been in the works?
But one of the more interesting questions about their marriage may be, What will happen to their $142 billion fortune?
How Are Assets Divided in a Divorce?
To see what might happen to their assets, let’s look at how assets are divided in a typical divorce. In Florida, the law requires a fair and equitable division of marital assets in a divorce.
Marital assets that are fairly divided include:
- Assets acquired during the marriage
- Some retirement benefits acquired during the marriage
- The enhanced value and appreciation of non-marital assets
- Gifts given during the marriage
Assets divided during a divorce typically do not include non-marital assets which refer to:
- Assets acquired before the marriage
- Assets acquired through inheritance during the marriage
- Assets acquired through a non-spousal gift during the marriage
Couples can determine how to split their marital assets through agreements and/or divorce mediation. Or, they may already have a plan for splitting up their assets in the form of a prenuptial agreement.
If the couple can’t determine how to split up assets, a judge may intervene. The judge will base their decision off equitable distribution. But, that doesn’t always mean the split will be 50/50.
When determining how to split assets, the court will consider details such as:
- The length of the marriage
- The economic conditions of each spouse
- Each spouse’s contribution to the other’s education or career advancement
- Each spouse’s contribution to improving marital or non-marital assets
- Each spouse’s contribution as a partner or homemaker
- Wrongful conduct during the marriage
- Waste or depletion of assets caused by one party
So, what does all of this mean for Bill and Melinda Gates?
How Will $142 Billion Be Divided?
Bill and Melinda Gates started dating in 1987, one year after Microsoft (the company founded by Gates) went public. The couple married in 1994, at a time when it was reported that Bill was the richest person in the United States with more than $9 billion.
Bill Gates was a billionaire when he and Melinda married, but they did not sign a prenup.
With no prenup, the couple or the courts will determine how to split their $142 billion (as valued by the Bloomberg Billionaires Index).
It’s worth noting that the laws regarding divorce in Washington state may differ from the divorce laws in Florida. The couple’s primary residence is a home in the Seattle suburbs so their case was filed in Washington state and will abide by laws in that state.
But, regardless of where their case is filed, it appears that the couple has done their best to keep their divorce out of the courts as much as possible.
The Petition for Divorce filed by Melinda includes language that states, “to divide real property as set forth in our separation contract” under the real property, personal property, debts, and spousal support section of the document. It appears that prior to the divorce and outside of the court system, Bill and Melinda created a separation contract pursuant to Washington law RCW 26.09.070.
Under RCW 26.09.070, couples “may enter into a written separation contract providing for the maintenance of either of them, the disposition of any property owned by both or either of them, the parenting plan and support for their children and for the release of each other from all obligation except that expressed in the contract.”
With reports that Melinda has been meeting with divorce attorneys since 2019, it isn’t surprising that the couple has already worked through the details of splitting their assets outside of the court system. It also appears that the couple is already at work dividing their assets. Bill has transferred around $2 billion in stock to Melinda since the announcement of their divorce.
So, how will a divorce divide up the $142 billion fortune of Bill and Melinda Gates?
Under this agreement, it appears that the public may never know how the assets are split, and the courts won’t have a say in the division.
Simplifying Asset Division During a Divorce
The divorce announcement of Bill and Melinda Gates came shortly after another high-profile divorce announcement. Kim Kardashian and Kanye West recently announced their divorce, prompting questions about how the couple would split up their combined net worth of approximately $2.1 billion.
But like Bill and Melinda, Kayne and Kim seem to have used agreements (in their case, a prenup) to avoid a lengthy legal battle.
Both cases show the value of having a plan going into a divorce. Being able to make decisions out of court is how couples have the best chance at spending less money on the divorce as well as less time in court.
If you are going through a divorce, see how you can make a plan to simplify your asset division by working with an experienced divorce attorney. Contact TJ Grimaldi for a free consultation to discuss the details of your separation. Schedule your consultation or call 813-226-1023 today.