Managing Business and Charities Together After Divorce

Bill and Melinda Gates’s divorce announcement was headline news with much attention about how they would divide their fortune. The couple has not disclosed the details of the asset division, but it is reported that Melinda French Gates could receive more than $62 billion. In addition to jointly owning a vast array of assets (with no prenuptial agreement in place), the couple is also co-chairs and trustees of The Bill & Melinda Gates Foundation. So how the couple plans to manage that partnership in the future will be of interest to many couples working together in profit or non-profit ventures.

What’s at Stake

The Bill & Melinda Gates Foundation has a $50 billion endowment. These funds are not a marital asset, cannot be divided in the divorce, and must remain with the Foundation. Those assets are held in an irrevocable charitable trust and are protected from the divorce proceedings entirely.

What is at stake is how the Foundation can continue to operate when its co-chairs cannot remain married to each other. The Foundation does work that has a significant impact globally. It describes itself as working “to help all people lead healthy, productive lives. In developing countries, it focuses on improving people's health and giving them the chance to lift themselves out of hunger and extreme poverty.” The Foundation employs 1600 people who provide annual grants of $5 billion to 135 countries. Difficulties at the leadership level are likely to impair the Foundation’s mission and impact people’s lives worldwide.

Two-Year Trial

Realizing that it may prove challenging to work together after the divorce, Gates and French Gates have announced they will undergo a two-year trial period after the divorce to determine if they can continue to work together for the good of the Foundation. If they agree that they cannot work together at the end of that time, French Gates will resign her position.

French Gates intends to continue doing charitable work. Thus, Gates would essentially buy her out of her interest in the foundation, providing her with his own private funds (NOT Foundation funds) to begin her own charitable ventures should the partnership not work.

In a nod to the challenges of working together as a divorced couple, they announced they would be adding additional trustees to the Foundation. Warren Buffet recently resigned his role, and Bill Gates, Sr. recently passed away, leaving openings.

Expressing Commitment

Both Gates and French Gates are publicly presenting that they plan to continue working together beyond the two-year trial. At the time of the announcement, they added another $15 billion to the Foundation’s endowment, signaling the importance of the Foundation and their joint commitment to it.

It has been noted in recent years that their charitable interests have slightly diverged. In 2015, French Gates founded Pivotal Ventures, a separate investment and incubation firm founded on advancing gender equality and supporting families.

Working Together After Divorce

Continuing a business or charitable partnership after a divorce presents a vast array of challenges for any couple. The end of a marriage, no matter how amicable, creates tension and resentment that are likely to carry over to the board room. The decisions Gates and French Gates have made concerning their ongoing partnership provide several key guidelines to follow if you hope to continue working with your spouse after a divorce.

  • Create separation. Separate out your business and personal relationships. The only way to continue to work together in a business or charity is if your personal problems are completely separate from the work you will do together. You must be careful not to let disagreements or emotions bleed over from the personal to the professional if you are going to work effectively. For example, Gates and French Gates have clarified that their marriage ending is completely separate from their work at the Foundation. They remain committed to continuing the Foundation even though their personal relationship has ended.
  • Redefine your relationship. While you were married, working together was simply part of your marital relationship. Now that you are no longer spouses, it is important to establish exactly what your roles in the business are and to iterate what your separate responsibilities and roles will be moving forward. Gates and French Gates have identified their roles at the Foundation and their commitment to those roles. By adding to the endowment, they have made clear their joint responsibility to the Foundation.
  • Add additional help. Now that you are no longer married, you can expect that you and your former spouse may not always see eye to eye. Because of this, it can be helpful to bring on new people in leadership roles to provide a buffer, a neutral approach, a tie-breaking vote, and a calming influence. Gates and French Gates are adding trustees to the Foundation who are likely to do just this.
  • Create an exit strategy. There is always the chance your ongoing business relationship will not work out. Even if you hope and believe that will not be the case, planning for that outcome will ensure that the business or charity can continue to run smoothly if you part ways. It is helpful to decide if one person will leave and, if so, what kind of buy-out will be involved. If the entire business is to be sold, it is important to negotiate those terms in advance so that a swift and clean exit is possible. Gates and French Gates have done exactly that, with a two-year plan for a trial and the terms of French Gates’s exit set out should it be necessary.

Working together after a divorce can be challenging. Still, if you are both committed to the business or the charitable cause, it is possible to set personal feelings aside and continue to work for a common goal. It is essential that your divorce decree specifically lays out all the terms and conditions you have agreed upon so that your plan is clear.

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Dror Bikel

Dror Bikel founded and leads Bikel & Schanfield, New York’s best known firm for high-conflict matrimonial disputes. A New York Superlawyer℠ and twice recognized (2020 and 2021) New York Divorce Trial Lawyer of the Year, Dror’s reputation as a fearsome advocate in difficult custody and divorce disputes has led him to deliver solid outcomes in some of New York’s most complex family law trials. Attorney Bikel is a frequent commentator on high profile divorces for national and international media outlets. His book The 1% Divorce - When Titans Clash was a 5-category Amazon bestseller.

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