The fact that Amazon’s founder, Jeff Bezos, was getting divorced after 25 years of marriage may not have been that big of a deal, except for one small detail that the press quickly noted: The couple had no prenuptial agreement.
That means there could be a big shake-up in store for Amazon.
The couple makes their home in Washington, which is a community property state. In community property states, nearly everything acquired during a marriage is considered jointly owned — and subject to division. This means that all of the billions that Amazon’s founder has invested in his company are assets that have to now be divided with his spouse. Unlike California, Washington doesn’t require a divorcing couple to divide their assets strictly 50-50, but the split of a long-term marriage like this one makes that sort of division highly likely.
Right now, Amazon’s founder owns 79 million shares of Amazon stock or roughly 16 percent of the company. (If that sounds small, consider this: The second-largest stockholder only owns 6 percent of the company’s shares.) After the divorce, however, he may find himself the owner of just a mere 8 percent of the stocks — with his ex-wife the owner of another 8 percent.
That could get terribly inconvenient if the two fail to see eye-to-eye on the company’s future or can’t work well together outside of their failed marriage.
Experts say that it’s unlikely that the couple will allow things to go before a judge. Many high-profile, high-asset couples work out the details of their divorces behind closed doors. Negotiations are often kept private in order to protect their privacy — and company stock. It will generally benefit everyone if they’re able to come to some sort of amicable solution that doesn’t require a big sell-off of stock by either party.
Cases like this illustrate — albeit on a larger scale than most — why it is so important for business owners to protect themselves (and their business) with a prenuptial agreement. When you own a business, divorce has consequences far outside the norm for most people.
If you’re a business owner who anticipates a divorce in the near future, get advice relevant to your specific situation as early as possible.