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What can SME business owners learn from the Bezos divorce?
9th April 2019, 8:00 am
Earlier in the year, Amazon CEO Jeff Bezos and his wife of 25 years, MacKenzie, announced their divorce. Considered to be the world’s wealthiest man, Jeff has an estimated fortune of around $137 billion.
While it is worth stating that the US family law system is very different to that of England and Wales in many respects, a similarity is that during the course of a marriage, your financial assets usually become entwined − for example, a business can be considered as much of an asset as the matrimonial home.
What happens to my business upon divorce?
Every marriage and divorce is different. However, when dividing assets in England and Wales, the Court takes into account a number of factors, including:-
- Income and earning capacity, property and other financial resources that each spouse has or is likely to have in the foreseeable future
- The standard of living enjoyed by the family before the breakdown of the marriage
- The contributions that each spouse has made or is likely to make in the future to the welfare of the family
- The value to each spouse of any benefit that one spouse would lose because of the divorce
- The financial needs, obligations and responsibilities, which each spouse has or is likely to have in the foreseeable future
- Whether the parties had a pre-nuptial agreement or post-nuptial agreement in place upon the breakdown of a marriage would also be a further factor that the court would give consideration to when dividing the assets upon divorce
How can I protect my business from divorce?
While we would certainly expect the matrimonial pot to be substantially bigger for the CEO of Amazon than that of most SME business owners, divorce is likely to have a major impact on your business; therefore, pre-nuptial and post-nuptial agreements are invaluable in terms of wealth and asset protection and should always be considered upon entering into a marriage, founding a business whilst in a marriage, or indeed at any stage thereafter.
Remember that any decision made by the courts of England and Wales will be based foremost on the financial needs of the parties taking into account what is fair and reasonable in the circumstances, especially in a lengthy marriage such as that of Jeff and MacKenzie Bezos.
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