Bill and Melinda Gates made a surprising announcement earlier this month that they had decided to end their 27-year marriage. The two are among the wealthiest people in the world and run one of the world’s largest private charitable foundations together. Yet, I see many clients like them every day. What do they have in common with this power couple?
“Gray divorce.” The rate of divorce among the 50+ population has increased dramatically over the last 25 years. Regardless of the reason for it, the reality is that such couples have had years to accumulate wealth together and dividing it up fairly in divorce is a big concern. However, the Gateses don’t have to worry about money troubles, unlike many other couples. Often, late-life divorces can be difficult financially for spouses because assets and income are reduced because of the divorce and retirement while certain expenses are going up, such as health care. Women are especially likely to experience financial insecurity following a divorce.
Lack of a prenuptial agreement. Apparently, the Gateses did not have a prenuptial agreement, which is surprising considering that Bill Gates was already a wealthy man 27 years ago. However, they have a lot of company in the population. Only a small portion of couples have a prenup, but most marriages would benefit significantly from having one. They help couples address potential financial problems before they arise, including determining how to deal with financial assets and debts they each bring into the marriage.
Negotiating a settlement. While the Gateses did not have a prenuptial agreement, they did negotiate a separation agreement, dividing their property before announcing their divorce. Unfortunately, not enough divorcing couples do this. Society tends to view divorce as a win-lose battle, but settlement is much more cost-effective, and the parties are more likely to be satisfied with the outcome because they came up with the solution rather than a court imposing one on them. If you are among those ready for a fight, consider whether you can find room to compromise instead. You don’t have to do it alone. Consult an attorney-mediator or collaborative divorce professional who can guide you through the process.
The desire for privacy. Many couples who pursue alternative dispute resolution (ADR) are looking for the privacy that mediation and collaborative divorce provide. Litigation is public and financial and personal information is accessible to anyone. In ADR, the parties must keep all communications confidential. Any statements and evidence introduced during the process are not admissible in court if the ADR fails to result in a settlement.
The Gates’ financial settlement discussions may have been contentious, but they were incentivized to find agreement. While the average couple doesn’t have their reasons to settle their divorce, compromise can make the process much easier allowing all parties to move forward in their lives sooner.
If you are considering divorce, you have choices in how you handle it. The best approach is to talk with an attorney about your options.
My goal as the Divorce Sherpa is to help couples avoid costly mistakes and guide them every step of the way on the path to their new post-divorce life. Contact me for a “divorce process” consultation.