Jeff and MacKenzie Bezos may split his $137 billion fortune in half when they divorce - here's what typically happens when billionaires break up

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Jeff and MacKenzie Bezos may split his $137 billion fortune in half when they divorce - here's what typically happens when billionaires break up

Jeff Bezos divorce money 4x3

Imeh Akpanudosen/Getty; Skye Gould/Business Insider

Jeff Bezos and Mackenzie Bezos are getting divorced after 25 years of marriage.

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  • Jeff Bezos, founder and CEO of Amazon, announced on Twitter Wednesday that he and his wife, MacKenzie Bezos, are divorcing after a 25-year marriage.
  • Bezos, who has a reported net worth of nearly $137 billion, lives in Washington, a community property state - all assets acquired during marriage are to be divided equally if the Bezoses didn't sign a prenup or postnup dictating otherwise.
  • This means Bezos might have to sell stock, which could affect his control of Amazon, according to a CNBC report.
  • When billionaires like Bezos get divorced, they more commonly have to deal with complex and illiquid assets, company issues, and public perception, say divorce attorneys.

Jeff Bezos, founder and CEO of Amazon, announced on Twitter Wednesday that he and his wife, MacKenzie Bezos, are divorcing after 25 years of marriage.

Could the world's richest man end up in the world's most expensive divorce of all time? It depends.

For Bezos, who has a reported net worth of nearly $137 billion, there's a lot more at stake than there is in a typical divorce - as is often the case with high-net-worth couples.

"The major thing for billionaires is that most of the time, their assets are very complex and mostly illiquid - with Bezos, a lot of his assets are linked to Amazon stock," Jacqueline Newman, matrimonial law attorney and managing partner of Berkman Bottger Newman & Rodd, LLP, told Business Insider.

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The Bezoses' state of residence, Washington, further complicates matters for Bezos' Amazon holdings. It's a community property state, which means wealth accrued during his and MacKenzie's marriage could be split in half, Karin J. Lundell, matrimonial and trust and estate partner at Rower LLC, told Business Insider.

However, such distribution could be altered if the Bezoses signed a prenuptial or a postnuptial agreement, she said. "Often, very wealthy people have prenups that lay out the division of their property. A prenup can carve out certain things and say 'we'll divide this up.'"

It's unclear whether the Bezoses have a prenup. If they don't, MacKenzie could receive up to $66 billion based on Amazon's value under the community property law, Robert Frank of CNBC reported.

Read more: There are 2 types of contracts married couples can sign to protect their money - here's what it means if divorcing billionaires Jeff and MacKenzie Bezos never signed one

"To fund a settlement that big, Bezos would have to sell or pledge shares, which could dilute his ownership and control of the company," he wrote, reporting that Bezos owns less than 16% of Amazon, equivalent to nearly 80 million shares.

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A fortune tied to company stock, like Amazon, complicates divorce for billionaire couples

Having a net worth tied to company stock is an issue billionaires like Bezos often have to contend with in a divorce. Deciding what to do can get tricky - you could transfer the stock itself, but if you do, you could lose control of the company depending on your stake, Newman said, adding, "If Bezos sold a stock, then they can cash out."

That doesn't mean that's what will happen in Bezos's case, though.

"Divorce attorneys say that it is highly likely MacKenzie would want the family fortune to continue to grow - and that is tied large part to Jeff Bezos' control of the company," Frank wrote. "So she would be unlikely to push for a settlement that would require him to sell shares that would dilute his control - and any reduction of his 15% stake in the company."

But running a company brings more issues for divorcing billionaires than the possibility of having to transfer or sell a stock to fund a settlement and possibly lose company control.

"Most of the time, it's valuation issues - how to value assets in business," Lundell said. "The publicly traded stocks are easy to value - you don't want to sell because that causes fluctuation. [It's] business interests that are harder to value and are more complex assets - [like] the Washington Post; we don't know the value of that."

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Read more: Billionaire couple Jeff and MacKenzie Bezos live in one of the best states in the US to get divorced if your spouse is loaded - here are the rest

With assets that are hard to value and hard to liquidate, divorce proceedings can take longer because there's a more complex evaluation, according to Newman.

And for billionaires in the public eye, like Bezos, there's also the issue of how the divorce will affect the company itself, Newman said: "They could be distracted or emotionally charged, there could be concern about whether there will be a transfer of actual shares and who's running the company, [and] stocks could go down."

For high-net-worth individuals not tied to a company, their public image could be just as important, Newman added, like an actor or public figure needing to deal with tabloid fodder.

But for Bezos, she said, "The concern is the company and the shares, that's the biggest issue. Beyond that, children are involved. When you're dealing with people of these levels, there are a lot of cooks in the kitchen, a lot of vested interest."

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