Bill And Melinda Gates Are Divorcing; Do They Have A Prenup?
The answer is... it's complicated.
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Bill Gates, the co-founder of Microsoft Corporation and the fourth-richest person in the world, made this announcement on Twitter on Monday afternoon:
His wife Melinda Gates posted the exact same statement at the exact same time. Given the size of the Gates fortune, estimated by Forbes at $130.5 billion, inquiring minds want to know: do the Gateses have a prenuptial agreement, aka a prenup?
At first glance, it might appear that the answer is no. If you look at the petition for divorce that Melinda Gates filed against Bill Gates today (via TMZ), you’ll see question 11 and the parties’ response to it:
Question 11 refers to “a prenuptial agreement” and a “separation contract” as two different things. And they appear to be governed by two different statutory provisions, RCW 26.09.070 (separation agreements) and RCW 26.16.120 (“agreements as to status,” a category that includes prenups).
But the New York Times reported that the Gateses “are believed to have a prenuptial agreement.” So this made me wonder: could there be more going on here?
After tweeting out some preliminary thoughts on this, I heard from Thomas Kretchmar, a partner at Chemtob Moss Forman & Beyda, LLP in New York. Here’s what Tom shared with me (standard caveats: he doesn’t practice in Washington State, none of this is legal advice, etc.):
Perhaps the situation is what it appears to be at face value: no prenup. But it seems to me that it's equally plausible that what's really going on is that there was a prenup, but the separation agreement expressly supersedes the terms of the prenup in its entirety, as an updated and more comprehensive settlement of the parties' financial matters. Separation agreements commonly do that, or variations on that: they either supersede a prenup in its entirety, or they incorporate by reference an existing prenup either in whole or in part. It seems plausible to me that if the Gates separation agreement superseded the prenup in its entirety such that, in effect, the prenup no longer exists, then the attorneys who prepared the petition may have felt it unnecessary or even inappropriate to mention a prenup in that section of the petition.
If the document has been superseded out of existence, perhaps Washington state practice provides that you don't make reference to it in that section. This is just a theory; I could be mistaken and perhaps there's just no prenup at all. But for anyone who thinks that that doesn't make sense, and that there must have been a prenup, then the theory above certainly reconciles some of the disconnect created by what the petition appears to indicate.
It may also be worth noting that a separation agreement is really, for all pertinent intents and purposes, a final settlement agreement. Matrimonial attorneys use the term "separation agreement," but when you think of it as a final settlement agreement (which is really what it is), that helps understand why a separation agreement could and would supersede and/or incorporate a prior agreement such as a prenup or a postnup.
Thanks to Tom Kretchmar for these excellent insights. You can follow him on Twitter at @tkretchmar.
So TMZ’s confident declaration that “there is NO PRENUP” might not be correct. As Bill Clinton famously quipped, “It depends upon what the meaning of the word ‘is’ is.” Maybe there “is” no prenup, but there was a prenup, and it just got superseded — fancy legal-speak for “supplanted” or “replaced” — by a separation agreement.
If we really want to know, we’d need to ask one of the many lawyers involved in this divorce (although they’re probably not talking, having been well paid for their discretion). Melinda Gates is represented by no less than three different law firms:
Sherri M. Anderson of Bellevue, Washington, an experienced matrimonial lawyer in Washington State;
Robert Stephan Cohen of Cohen Clair Lans in New York — one of the nation’s preeminent divorce lawyers, with many celebrity clients — and his partner, Shannon Rogers Simpson; and
Bruce Birenboim and Loretta A. Ippolito, a litigation partner and a trusts and estates (“Personal Representation”) partner, respectively, at Paul, Weiss.
Meanwhile, Bill Gates is represented by a trio of firms as well:
Ted D. Billbe, like Sherri Anderson, a seasoned divorce lawyer based in Bellevue, Washington;
Wendy Goffe, a trusts and estates partner in the Seattle office of Stoel Rives; and
Ronald Olson, Robert Denham, and Eric Tuttle, partners at the high-powered, super-elite law firm of Munger, Tolles & Olson.
This might seem like an awful lot of legal firepower for what appears to be an amicable divorce. But $130.5 billion is an awful lot of money.
If there is/was a prenup, then I’m guessing that Melinda Gates will not end up with the $36 billion that Mackenzie Bezos received upon divorcing Amazon founder and CEO Jeff Bezos. But I’m also guessing that Melinda Gates is okay with that.
If Bill and Melinda Gates wanted to maximize their fortunes, they wouldn’t have already given away so much of their money to the Bill and Melinda Gates Foundation, which has an endowment of $50 billion. And they wouldn’t have created and signed the Giving Pledge, promising to give away at least half of their fortune.
Regardless of who’s getting what, and even if it’s for the best, it’s always sad to see a longstanding marriage dissolve. The Gateses were married for 27 years and have three children together, ages 18 to 25. May Bill and Melinda Gates find happiness in their separate lives going forward, and thanks to them for the great charitable work that they have done and continue to do.
UPDATE (1:58 a.m.): Would Bill and Melinda French Gates have wanted or needed a prenup when they got married back in 1994? As Rafal Konopka notes on Twitter, “At the time of his marriage, Bill Gates was already worth $7 billion, the 2nd richest man in the US, and still owned 30% of Microsoft. He forced his wedding guests to sign NDA’s. This is not the kind of man who would risk losing control of his company to the whims of a local court.”
UPDATE (5/9/21, 10:45 a.m.): Actually, Bill Gates might have been worth even more at the time. According to CNET, citing Forbes, “By the time they were married in 1994, Gates was already the richest person in the US, with more than $9 billion in assets.” Also, just to be clear, it appears that the Gateses had wedding vendors sign non-disclosure agreements (per this Seattle Times article), not wedding guests.
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I take issue with the NYT saying they “are believed to have a prenup . . .” Who believes that? The reporter? Some guy at Starbucks? Thank you for your reasoned analysis—and NDA line at the end. LOL.