What If Jeff Bezos Got Divorced In Texas?

The settlement of the Bezos divorce has been big news this month.  According to news reports, Jeff Bezos is to receive 75% of his and MacKenzie Bezos’ stock in Amazon. Her share of the stock is worth about $36 billion dollars, making her one of the wealthiest women in the world, at 48 years old. We don’t know what other assets she might have received.

For instance, we don’t know how they may divide their real estate holdings which include mansions in Bellevue, Washington, and Beverly Hills; the largest private home in Washington, D.C.; the Texas ranch; and multiple condos in New York City—all worth tens of millions of dollars in the aggregate. We do know, though, that he gets all of their interest in the Washington Post and Blue Origin, the space travel business.

But considering the huge value of Amazon stock, I think it’s fair to assume this is the largest asset of their marital estate.  Based on that, it would be very difficult to see how she could be receiving half of their assets.  So, I have to ask: Why does Jeff get more than MacKenzie? As Peter Walzer, president of the American Academy of Matrimonial Lawyers asked, “She’s one of the wealthiest people in the world, but…why wouldn’t she get half of everything?”

From my limited research, I’ve learned that Washington state divorce laws (where the divorce is presumably being pursued), treats property accumulated during the marriage as shared between the spouses (community property) unless there is a prenup. There has been no discussion of a prenup, so we really don’t know (but it seems that it would have been mentioned if it existed). The rule for dividing property in Washington state is “just and equitable”, so it does leave some room for argument as to the application of those terms to any fact situation.

But really the only arguments I can think of for Jeff Bezos to receive a greater share are: leaving them as equal owners of Amazon would put the company in jeopardy; or he is the one primarily responsible for the unbelievable accumulation of wealth during their marriage, so he should get a greater share.

What if Jeff Bezos had filed for divorce in Texas (based on their ranch here, which I assume has a home), and had a contested divorce?  What would a judge do?  Would either of those arguments work?  Well, Texas is also a community property state, and has a very similar standard for the division of assets: “a just and right division”.  Is there a difference between a “just and right” division and a “just and equitable” division?  If you were talking to a dictionary editor, or a legal scholar, just looking at those words, I doubt there would be much difference. But the actual answer would be based on the cases which have worked their way up through the appellate courts of each state and become precedent which the trial courts must follow.

And, in Texas, those cases provide a number of reasons that one party might receive a disproportionate division: fault in the breakup of the marriage, disproportionate earning power, and the ownership of separate property (not part of the marital property is divided), being the primary reasons.  If you applied those to the Bezos’, it seems likely that any disproportionate division would be in MacKenzie’s favor: it’s very public that Jeff was having an affair, and Jeff arguably has much more earning power (even if we only look at his majority ownership of Amazon).  But here he gets a disproportionate division.

Also, it’s very uncommon in Texas for either spouse to receive a disproportionate division when the assets are worth over even a couple of million dollars. We usually tell our clients that this is because most of our judges don’t have a couple of million dollars, so they’re unsympathetic to someone who wants an extra 100K or two.

I was involved in a divorce a few years ago where the assets were around 40 million dollars. The husband took the position that because he was 100 percent responsible for the creation of that wealth, he should get the majority of it. This didn’t go to trial, but there was a lot of briefing, arguing, and negotiation resulting from his position (and a couple of million dollars in fees spent), and he didn’t get anywhere with that theory. Texas case law provides no support for it.

So, why is MacKenzie getting a disproportionate division?  I guess we’ll have to wait for the book or the Dan Rather interview. We may never know. Most likely, it just makes sense and these folks are being reasonable. She has more than she can ever use, plus a whole lot. He gets to continue to grow Amazon–and the more successful it is, the wealthier she will be since she still owns a stake in it. And, of course, they have young children and this could be impacting their desire to have an amicable divorce—and for her to settle for a measly $36 billion-plus.