Seattle/New York: Bill and Melinda Gates, who for decades have overseen one of history’s greatest fortunes and philanthropic operations, said they plan to divorce.
The announcement Monday that the couple is splitting after 27 years of marriage has the power to ripple through the technology industry, a vast portfolio of business and real estate holdings and into the realms of global health, climate change policy and social issues including equality for women.
The pair, who command an estimated $146 billion, according to the Bloomberg Billionaires Index, made no hint of their financial plans, though they emphasized that they will cooperate on continuing their philanthropy.
“After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage,” the two said in a brief statement posted on Twitter. “We have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives.”
— Bill Gates (@BillGates) May 3, 2021
Bill Gates, the 65-year-old co-founder of Microsoft Corp., ranks as the world’s fourth-richest person. Melinda Gates, 56, is a former Microsoft manager who’s gained international prominence co-running the Bill & Melinda Gates Foundation. It’s already given away more than $50 billion.
They will remain co-chairs and trustees of the foundation, a spokesperson for the organization wrote in an emailed statement.
“No changes to their roles or the organization are planned,” according to the statement. “They will continue to work together to shape and approve foundation strategies, advocate for the foundation’s issues, and set the organization’s overall direction.”
It’s the second bombshell divorce among the uppermost ranks of the world’s richest people in recent years, following the 2019 separation announcement of Jeff Bezos and MacKenzie Scott.
That split, which divided the couple’s stake in Amazon.com Inc., immediately made MacKenzie one of the world’s richest people. In the months that followed, she became one of the most influential philanthropists in the world, giving away billions of dollars to often overlooked causes among billionaire donors.
The Gates’s wealth could prove more complex to carve up than the Bezos fortune, which was largely concentrated in Amazon stock.
Bill Gates’s net worth originated with Microsoft but shares of the software-maker now probably make up less than 20% of his assets. He’s shifted much of his stake into the Bill & Melinda Gates Foundation over the years and his exact stake hasn’t been disclosed since he left Microsoft’s board last year.
Gates’s biggest asset is Cascade Investment, a holding company he created with the proceeds of Microsoft stock sales and dividends that’s run by Michael Larson. Through Cascade, Gates has interests in real estate, energy and hospitality as well as stakes in dozens of public companies, including Canadian National Railway and Deere & Co.
Monica Mazzei, a divorce attorney and a partner at Sideman & Bancroft LLP in San Francisco, said the big question concerning the couple’s foundation and family office is to what extent they plan on working together going forward.
“Even in the most amicable divorces I’ve seen, the preference has been to split the foundation in two so that there’s more autonomy and less intermingling,” she said. The same principle applies to family offices, where the investments could be divvied up into two separate pots.
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Secrecy possible
The pair live in Washington, which is a community property state. That means that anything acquired during a marriage is considered equally owned by both partners, but that doesn’t necessarily mean the fortune will be split in half.
“It is not a mandatory 50-50,” said Janet George, a family lawyer in Washington with the firm McKinley Irvin. “The courts can award more or less, depending on what is just and equitable.”
The state also mandates a 90-day cooling off period from the day a couple initially files for divorce, and the soonest it can be finalized by a judge. A search of King County public records Monday turned up no such filing from Bill and Melinda Gates.
George said the public might never find out how they split the fortune, because it can be hidden behind private contracts.
It couldn’t be determined if the two signed a pre-nuptial agreement. Their youngest child is 18.
Becoming philanthropists
The pair met in New York in the 1980s, early into Melinda’s time at Microsoft.
When deciding whether to marry, Bill made a pro-and-con list on a whiteboard — Melinda related how she walked into his bedroom to find him tabulating various factors in the Netflix documentary series “Inside Bill’s Brain.”
The couple’s philanthropy has always been deeply rooted in their relationship and marriage. The day before they wed in Hawaii, Bill’s mother, Mary, who had been trying to convince him to dramatically increase his charity, gave Melinda a letter which closed with the words “From those to whom much is given, much is expected.” Mary Gates died several months later.
But it was on a trip to Africa during their engagement that the couple decided they would become serious philanthropists.
“We fell in love with everything we saw but it’s really not at all trite to say that we really fell in love with the people,” Melinda said at a Salesforce event in 2016. “It just started us on this series of questions of sort of saying to ourselves, ‘What is going on here?’”
Later on in the trip, the couple filled out a marriage questionnaire to make sure they had the same values. That’s when they decided “the vast majority of resources from Microsoft would go back to society,” Melinda said. “It was an easy discussion. We just thought it would be later in our lives when we got to do it.”- Bloomberg
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