How do big divorces like Melinda and Bill Gates’ work?
Did they have a prenup? Probably. Did teams of lawyers hammer out every detail way before an announcement was made? You can count on it.
Yesterday afternoon Bill and Melinda Gates announced in a joint statement on Twitter that they were getting a divorce after having been married for 27 years. Bill Gates is one of the founders of Microsoft, and his net worth is estimated to be $130 billion. The couple co-founded the Bill & Melinda Gates Foundation, a nonprofit dedicated to “fighting poverty, disease, and inequity around the world.”
On the same day they made the announcement, Melinda Gates filed a divorce petition with the Superior Court of King County, Washington. The 12-page document, a scan of which TMZ posted on its website, spells out the basics of the case, including cause, “This marriage is irretrievably broken,” and desired outcome, “We ask the court to dissolve our marriage and find that our marital community ended on the date stated on our separation contract.”
T&C asked Thomas Kretchmar, an attorney specializing in matrimonial and family law at Chemtob Moss Forman & Beyda, to describe how a legal parting of ways like this works.
How does a divorce between two people of such immense means play out?
I’ll start by saying that by the time a divorce like this is announced, particularly one where the parties choose to make a formal statement together, you should fully expect that the entire divorce has essentially been resolved. In other words, they've probably been working on this for months or longer.
My understanding is they already filed paperwork with the Washington court indicating that a separation agreement has been signed. For all intents and purposes, a separation agreement is really a settlement agreement. It means they've already ordered their affairs, reached their agreements about financial and all other matters concerned.
What are the benefits of reaching a settlement before making an announcement?
It facilitates what is often one of the highest priorities—especially when there's plenty of money to go around for both sides—which is to keep as much of the whole situation out of the public eye as possible. If you have not settled all matters before news gets out, and if you end up up in court, you’ll face scrutiny from the public in a setting where there's no guarantee that various statements and filings will be kept secret.
Some have speculated after reading the petition that the couple did not have a prenuptial agreement. Do you agree?
I think it's perfectly plausible that the couple actually did have a prenup even if they referred to a separation contract in a divorce petition. That’s because, again, a separation contract is really a settlement agreement, which is the document that achieves a final settlement of the parties’ financial matters. When a separation agreement is reached, it supersedes—replaces—a prenup. In other words, there would be no reason for attorneys to mention a prenup in the petition if a settlement contract exists.
Do both parties get a better deal with a settlement contract?
One thing that is true for all divorces, but is especially relevant in a divorce of this scope and nature, is that in non-acrimonious situations, involving counsel early in the process can allow them to become deeply immersed in the case and to develop a very detailed understanding of the issues. This familiarity can allow teams to help to settle things—let’s put it this way—with a scalpel rather than a hammer.
No matter how sophisticated and competent the judiciary of any given state is, you cannot expect a judge presiding over numerous cases to have the resources available that would allow him or her to arrive at as finely tuned a resolution of a divorce as you can achieve when you've got teams of attorneys on both sides, who have been given plenty of time, working to reach a mutually agreeable conclusion.
Aside from dividing assets, what kind type of things would be negotiated in a separation contract?
When you work on these mutual negotiations of a divorce, you are able to bring in things like, “I don't want you to be able to talk about this aspect of my life,” or “I don't want you to be able to write about our children in any forthcoming memoir,” or “I don't want you to be able to discuss the business relationships that I've cultivated,” and that sort of thing.
Another thing you can achieve through negotiated settlement, as opposed to a litigated divorce, is non-compete type stuff. I don't think there's any reason to expect that the Gateses would be competing with one another in professional capacities, but the big issue of course is their charitable work. I imagine they both have tremendous interest in continuing their philanthropic endeavors, and I would not be surprised if part of the heavy lifting that went into preparing a separation agreement was the inclusion of terms that govern how they go about their charitable work going forward and language that governs how they will not step on one another's toes within that world.
Does the fact that Melinda Gates did not request spousal support mean anything?
It doesn't seem significant to me for two reasons. If they filed a separation contract, they've already settled all of their financial matters, and that may include a spousal support. So what the petition is really saying is, as far as I'm concerned, is neither party needs the court to award spousal support because spouse supports already been sorted out in the executed separation agreement that they're asking the court to enforce. Also, even though we don't know any specifics, I think it is reasonably safe to speculate that Melinda is walking away—prenup or no prenup—with a tremendous amount of money.
