After 27 years of marriage, the Gateses decided it was time to go their separate ways. Many questions and challenges surface. Is it realistic to continue to co-lead the $51 billion Bill and Melinda Gates Foundation? Who gets the $131 million lakeside mansion outside of Seattle? This promises to be one of the largest divorce settlements of all time. There are many challenges facing high-asset couples who divorce.
Irregular income, niche assetsThe blueprint for the Gates divorce may have been drawn in 2019 when Amazon founder Jeff Bezos divorced his wife MacKenzie in which she received $38 billion in Amazon stock. Like all high-assets couples, the Gateses and Bezoses faced challenges unlike the average divorcing couple. Here are some of them:
- Irregular income: High earners are not paid the same way as the average person. Dividends, bonuses and royalties often represent their income stream. These factors can complicate things in divorce.
- Determining and maintaining the same lifestyle: Determining alimony and child support for a former spouse and the minor children is crucial in order for them to maintain the same lifestyle.
- Lengthy divorce process: Expect a time-consuming affair with high-asset divorces. Finding, evaluating, selling and transferring assets is necessary to assure equitable distribution of assets.
- Hidden assets: A 2018 poll of more than 400 people disclosed that 53% of the participants maintained money secrets from their partners. Hiding assets in a divorce is against the law, and you could face jail time for doing so. However, in high-asset divorce cases, those assets may not always be hidden intentionally.
- Accurate asset evaluation: Many high-asset couples invest in niche assets such as real estate, fine art, collectibles and gold. Determining the worth of such investments is not easy.
- The presence of foreign assets and investments: Determining the value of overseas investments such as properties and businesses is time-consuming.
Bill and Melinda Gates may expect a lengthy divorce process. However, perhaps, they have worked on a settlement well ahead of time. Regardless, high-asset couples who divorce face for more challenges and complications compared with the average couple.