News & Insights

Jeff and MacKenzie Bezos met at work in 1993. They were engaged and married within a year. The following year, they quit their jobs, moved to Seattle and founded Amazon. MacKenzie was an employee of Amazon, a novelist and later a mother of four.

Fast-forward 25 years, and Jeff is one of the richest people in modern history, with an estimated wealth of US$137 billion and the couple are now separating. They did not make a financial agreement dealing with how their property would be dealt with in the event of a separation.

The media is asking, “How much will MacKenzie walk away with? How much will Jeff have to give her to walk away?” There are also questions being raised in the business community regarding the wider implications for the Amazon empire.

In Australia, Financial Agreements can be made before, during or after a marriage or de facto relationship. They can deal with how, in the event of a breakdown in marriage or de facto relationship, all or any of the property or financial resources (personal and business assets, inheritance whether received or not) of both or either party will be dealt with, and spousal maintenance. Financial Agreements can be made in times of peace, limiting the stress, cost, exposure and interference with business assets.

What happens in Australia if there is no Financial Agreement (prenuptial agreement) in place? Using its wide discretionary powers, the Federal Circuit Court and Family Court can make an Order that is ‘just and equitable in all of the circumstances’. In determining what Order should be made, guidance is provided by the Family Law Act.

 1. What is the property?

The assets and liabilities need to be identified and valued. In the Bezos case, this is likely to be a lengthy and complicated task. There would likely be lengthy negotiations prior to any agreement on how much the specific assets are worth. The matrimonial property ranges from Amazon shares, The Washington Post, which Bezos purchased for US$250 million in 2013 and real properties – Jeff is the 28^th biggest landowner in the USA.

In Australia, without a Financial Agreement in force, the Act covers property the parties have an interest in (jointly, separately or through entities/trust).

It will be interesting to see how the Amazon assets are dealt with. According to the company’s proxy statement, Jeff owns just under 80 million shares of Amazon (approximately 16% of the total company). It is likely  he will have to sell these shares which in turn may create problems for the ownership and control of the Amazon company. This could potentially affect  the share market for investors in the company.

2. Contributions

The second stage for dividing assets considers the respective contributions made by each of the parties to the property. Jeff and MacKenzie had a ‘long marriage’ of 25 years. According to media reports, both MacKenzie and Jeff were equal partners in their shared married life. Each did the best they could in the role they decided each would occupy in the relationship. It is unlikely Jeff would have managed to achieve everything he did with Amazon without MacKenzie raising their four children.

Reports say  the couple operated as a “normal” family, having breakfasts together and mum taking the kids to school and being in charge of the day to day homemaker tasks. From other reports, MacKenzie, a Princeton University graduate and one-time Amazon accountant, was a sounding board for Jeff, and trusted advisor in business decisions.

In Australia, the Courts would recognise MacKenzie’s contribution not in a token way but in a substantial way, and would not necessarily attach greater value to Jeff’s financial contribution than MacKenzie’s contribution to the welfare of the family.

3. Future Needs

 The Court then considers whether there should be a financial adjustment due to a party’s “needs”, such as income earning capacity, health or care responsibilities. It is safe to say that Jeff and MacKenzie will be fine without a “needs” adjustment.

4. Just and equitable

The Court can then make an Order that is, in all the circumstances, “just and equitable”.

Of course the above scenario could have been avoided by Jeff and MacKenzie making a Financial Agreement at any time during the relationship.

We work with our clients to protect their personal and business assets by helping them to resolve or avoid complications; to provide peace of mind now and reduce disputes, stresses and distractions in the future. If you need advice or guidance creating a Financial Agreement, please contact our Family and Relationship Law team.

This article was written by Carly Burgess, Lawyer – Private Clients | Family Law