Bill and Melinda Gates, who for decades have overseen one of history’s greatest fortunes and philanthropic operations, said they plan to divorce.
The announcement Monday that the couple is splitting after 27 years of marriage has the power to ripple through the technology industry, a vast portfolio of business and real estate holdings and into the realms of global health, climate change policy and social issues including equality for women.
The pair, who command an estimated $146 billion, according to the Bloomberg Billionaires Index, made no hint of their financial plans, though they emphasized that they will cooperate on continuing their philanthropy.
“After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage,” the two said in a brief statement posted on Twitter. “We have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives.”
The couple established the Seattle-based Bill & Melinda Gates Foundation in 2000. It is one of the world’s largest charitable organizations, with a focus on public health, education and climate change.
Its grants included some $1.75 billion to vaccine initiatives, diagnostics and research during the coronavirus pandemic.
The foundation ended 2019 with net assets of $43.3 billion, the last full-year financials disclosed on its website.
The foundation spent $5 billion in 2019 on programs in the United States and around the world, excluding management costs.
From 1994 through 2018, Bill and Melinda Gates gave the foundation more than $36 billion, according to the foundation’s website. Warren Buffett has donated more than $29 billion of his fortune to the Gates Foundation since 2006, according to filings.
Bill Gates, the 65-year-old co-founder of Microsoft Corp., ranks as the world’s fourth-richest person. Melinda Gates, 56, is a former Microsoft manager who’s gained international prominence co-running the Bill & Melinda Gates Foundation. It’s already given away more than $50 billion.
They will remain co-chairs and trustees of the foundation, a spokesperson for the organization wrote in an emailed statement.
“No changes to their roles or the organization are planned,” according to the statement. “They will continue to work together to shape and approve foundation strategies, advocate for the foundation’s issues, and set the organization’s overall direction.”
It’s the second bombshell divorce among the uppermost ranks of the world’s richest people in recent years, following the 2019 separation announcement of Jeff Bezos and MacKenzie Scott. That split, which divided the couple’s stake in Amazon.com Inc., immediately made MacKenzie one of the world’s richest people. In the months that followed, she became one of the most influential philanthropists in the world, giving away billions of dollars to often overlooked causes among billionaire donors.
Complex to divide up
The Gates’s wealth could prove more complex to carve up than the Bezos fortune, which was largely concentrated in Amazon stock.
Bill Gates’s net worth originated with Microsoft but shares of the software-maker now probably make up less than 20% of his assets. He’s shifted much of his stake into the Bill & Melinda Gates Foundation over the years and his exact stake hasn’t been disclosed since he left Microsoft’s board last year.
Gates’s biggest asset is Cascade Investment, a holding company he created with the proceeds of Microsoft stock sales and dividends that’s run by Michael Larson. Through Cascade, Gates has interests in real estate, energy and hospitality as well as stakes in dozens of public companies, including Canadian National Railway and Deere & Co.
Monica Mazzei, a divorce attorney and a partner at Sideman & Bancroft LLP in San Francisco, said the big question concerning the couple’s foundation and family office is to what extent they plan on working together going forward.
“Even in the most amicable divorces I’ve seen, the preference has been to split the foundation in two so that there’s more autonomy and less intermingling,” she said. The same principle applies to family offices, where the investments could be divvied up into two separate pots.
An NYT report said the Gateses have faced relationship struggles over the past several years. The report claimed that sources close to the couple said ‘there were several times when the relationship neared collapse, but they worked to keep it together’.
“When he was having trouble making the decision about getting married, he was incredibly clear that it was not about me, it was about ‘Can I get the balance right between work and family life?'” Melinda Gates said in an interview in 2019 in The Sunday Times of London. “And, believe me, I can remember some days that were so incredibly hard in our marriage where you thought, ‘Can I do this?'”
The pair live in Washington, which is a community property state. That means that anything acquired during a marriage is considered equally owned by both partners, but that doesn’t necessarily mean the fortune will be split in half.
The Gateses are the largest owners of farmland in America and have vast investments though Cascade Investment, which manages Bill Gates’ personal wealth and owns large stakes in the Four Seasons hotel chain, the Canadian National Railway and AutoNation, the country’s largest chain of car dealerships, among other companies. The family’s homes and properties include a 66,000-square-foot Washington state mansion, which features amenities such as a trampoline room, a screening room and a multiroom library filled with rare documents and artifacts.
The couple, who have three children, have a custom mansion with a 2020 assessed value of $130.8 million, according to the King County Department of Assessments, on Lake Washington, which lies between Seattle and its eastside suburbs including Redmond, where Microsoft is headquartered.
“It is not a mandatory 50-50,” said Janet George, a family lawyer in Washington with the firm McKinley Irvin. “The courts can award more or less, depending on what is just and equitable.”
The state also mandates a 90-day cooling off period from the day a couple initially files for divorce, and the soonest it can be finalized by a judge. A search of King County public records Monday turned up no such filing from Bill and Melinda Gates.
George said the public might never find out how they split the fortune, because it can be hidden behind private contracts. It couldn’t be determined if the two signed a pre-nuptial agreement. Their youngest child is 18.
The pair met in New York in the 1980s, early into Melinda’s time at Microsoft.
When deciding whether to marry, Bill made a pro-and-con list on a whiteboard – Melinda related how she walked into his bedroom to find him tabulating various factors in the Netflix documentary series “Inside Bill’s Brain.”
The couple’s philanthropy has always been deeply rooted in their relationship and marriage. The day before they wed in Hawaii, Bill’s mother, Mary, who had been trying to convince him to dramatically increase his charity, gave Melinda a letter which closed with the words “From those to whom much is given, much is expected.” Mary Gates died several months later. But it was on a trip to Africa during their engagement that the couple decided they would become serious philanthropists.
“We fell in love with everything we saw but it’s really not at all trite to say that we really fell in love with the people,” Melinda said at a Salesforce event in 2016. “It just started us on this series of questions of sort of saying to ourselves, ‘What is going on here?'”
Later on in the trip, the couple filled out a marriage questionnaire to make sure they had the same values. That’s when they decided “the vast majority of resources from Microsoft would go back to society,” Melinda said. “It was an easy discussion. We just thought it would be later in our lives when we got to do it.”
Melinda – an influential figure
Melinda Gates, 56, could assume even more influence in the years ahead.
She already has her own firm, Pivotal Ventures, which she has used to invest in issues related to women’s economic empowerment. (Bill Gates has his own private office, Gates Ventures, for pursuing interests outside the foundation.) Should she receive a portion of Bill Gates’s Microsoft holdings, she could set up a new foundation or make direct gifts to other causes she supports.
“You could imagine Melinda Gates being a much more progressive giver on her own,” David Callahan, founder of the website Inside Philanthropy said in an NYT report. “She’s going to be a major force in philanthropy for decades to come.”