As a married couple, Bill and Melinda Gates have spent decades amassing one of the greatest fortunes in history. Now that they are divorcing, they have to sort out that $ 145 billion.
Details of the split have already started to emerge.
Cascade Investment, a holding company Bill started with Microsoft Corp. earnings, has transferred securities worth more than $ 1.8 billion to Melinda French Gates, according to U.S. regulatory filings dated May 3. over $ 300 million in AutoNation Inc. shares Cascade currently owns securities valued at over $ 50 billion, including interests in Republic Services Inc., Deere & Co. and Ecolab Inc.
The way their wealth is ultimately divided will rock the top ranks of the world’s richest people and could have billion dollar implications for the philanthropic causes that gain attention. The couple oversee the world’s largest private foundation and have vowed the majority of their wealth will be donated.
In announcing the split, the couple said they would both remain involved with the Bill and Melinda Gates Foundation, which has contributed huge sums in the fields of global health, climate change policy and public health. social problems. But the $ 50 billion operation – with billions more to donate – depends on the cooperation of two exes.
“As uncomfortable as it is, their personal relationship is going to have a huge impact on where the money goes,” said Benjamin Soskis, senior research associate at the Urban Center for Nonprofit Organizations and Philanthropy. Institute. “The Gates Foundation is the world’s most influential and largest philanthropic organization, and not just in terms of assets and grants. Bill and Melinda themselves have become incredibly influential public figures in their own right.”
The split, after 27 years of marriage, comes just two years after news of the 2019 separation of Jeff Bezos and MacKenzie Scott, another billionaire tech couple from Washington state, was announced. This divorce led to a 75-25 split of the couple’s 16% in Amazon.com Inc. for Bezos and Scott, respectively.
This made Scott the fourth richest woman in the world and spread across the global philanthropic landscape becoming one of the most prolific donors of 2020, contributing to the causes of gender equality alongside Melinda French. Gates.
Gates ‘fortune, at $ 145 billion according to the Bloomberg Billionaires Index, could prove more complex to allocate than Bezos’ assets, which were largely concentrated in Amazon stocks.
The couple’s net worth comes from Bill’s stake in Microsoft, but shares in the software maker are likely to be less than 20% of their assets. They transferred much of his stake in the Gates Foundation over the years and his exact stake has not been disclosed since he left the Microsoft board last year.
The biggest asset is Cascade Investment, which is managed by fund manager Michael Larson. Through Cascade, Gates has interests in real estate, energy and hospitality as well as in public enterprises. Canadian National is the third largest public holding in shares. Cascade has transferred 14.1 million shares to Melinda and owns 87.3 million shares, which are owned by Bill, the regulatory filing says.
The couple are also among America’s largest landowners and own homes, including their 66,000 square foot mansion in Medina, Washington.
The rapid transfer of shares could be a sign that it has already been decided how the fortunes will be divided.
“I imagine almost everything is done,” said Jacqueline Newman, divorce lawyer and managing partner at Berkman Bottger Newman & Schein LLP. “In order for them to make that kind of statement, they’ve probably settled 90 to 95 percent of the divorce. They don’t do something like that any other way.”
Community property status
The Gates live in Washington, which is a community property state. This means that anything that has been acquired during a marriage is considered to belong equally to both partners. But that does not necessarily mean that their fortunes will be distributed evenly.
“It’s not a mandatory 50-50,” said Janet George, Washington family lawyer at McKinley Irvin. “The courts can award more or less, depending on what is fair and equitable.”
Details of their split may never be publicly disclosed as they are likely hidden behind the couple’s private contracts, George said. Their holdings in state-owned enterprises large enough to have to declare holdings will provide insight behind the curtain.
What the couple own is one thing, but a big part of their focus over the past two decades has been on what to give.
The foundation is one of the largest private charitable foundations in the world, having provided nearly $ 55 billion in grants until the end of 2019. Former CEO of Microsoft, Melinda contributes to the organization’s strategy, with special emphasis on gender equity. Bill focused more on the science and global health of their donations.
“Bill and Melinda will remain co-chairs and trustees of the Bill & Melinda Gates Foundation,” a foundation spokesperson wrote in an emailed statement. “No changes to their roles or to the organization are planned. They will continue to work together to shape and endorse foundation strategies, advocate for foundation issues, and set the overall direction of the organization.”
Bill and Melinda Gates “weren’t just behind-the-scenes actors. They were decision-makers,” said Soskis of the Urban Institute, whose own work was supported by the Gates Foundation.
In cases where a wealthy philanthropic couple break up, their foundations are sometimes evenly divided, said Mela Garber, tax director at New York City accounting and consulting firm Anchin, which specializes in matrimonial matters.
Even when divorces are amicable, Garber said, “they might not want to be together at certain meetings and fundraisers, and have the same level of involvement with people around.” The complexities of two exes working together can become clearer over time, she said. “The creation of two new foundations removes a huge area of tension.”
Dividing the Gates Foundation is hard to imagine for many philanthropic experts. However, “they could pursue distinct goals within the confines of the foundation itself,” said Brian Mittendorf, a professor at Ohio State University who studies nonprofit organizations.
Already known thanks to his previous status as the richest man in the world, Bill Gates became even more famous when he became a leading expert on the pandemic at a time when official directions were often confused and contradictory. His work has made him a target for conspiracy theories as well as controversies over patents and how to open up global access to vaccines.
For her part, Melinda French Gates raised her profile with the publication of a book, “The Moment of Lift: How Empowering Women Changes the World”, in 2019. In recent years, she has contributed to the evolution of the foundation’s strategy. , as “The technocratic, top-down approach to giving has become more responsive to ‘the needs of the community and the input of the community,” Soskis said.
Despite its size, the Gates Foundation board has only three members: Bill, Melinda and Warren Buffett – who has pledged to devote most of his considerable fortune to founding his friends. This means that disagreements between the two exes may have to be worked out by the 90-year-old billionaire.
“As long as they have huge competing interests that might arise, Buffett would play an important role,” said Mittendorf of Ohio State University.
The couple could also pursue their distinct interests outside of the foundation, in their investments and personal philanthropy. Bill Gates, for example, founded Breakthrough Energy Ventures, a fund that fights climate change by investing in startups with the potential to reduce global annual emissions by 500 million tonnes per year. Other backers include Bezos and Michael R. Bloomberg, founder of Bloomberg LP.
In 2015, Melinda French Gates launched Pivotal Ventures, an investment and incubation company, “as a separate and independent organization to identify, help develop and implement innovative solutions to issues affecting women and men. American families ”.
In 2019, French Gates pledged $ 1 billion to accelerate the rate at which women have gained power and influence in the U.S. A year later, Pivotal announced that he would partner with MacKenzie Scott to launch the Equality Can’t Wait Challenge, a $ 30 million. Rewards organizations that propose ways to advance the power of women by 2030.
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