In 2019, there were several notable divorce-related events in the news. For our last post of the year, we are revisiting two of the biggest divorce events this year.
New tax laws took effect last year changing the rules for some spouses ending their marriage. Previously, alimony payments were tax-deductible for the payor and included as taxable income for the recipient of the support.
As of January 1, 2019, alimony payments are no longer deductible for the payor, and this significant tax change has impacted many divorce settlements. The change is intended to shift the tax responsibility to the higher income spouse while giving the lower-income spouse some financial relief.
Given the financial changes over the last year, it is important to engage a financial planner as well as an experienced divorce attorney in the divorce process.
In addition to tax changes, 2019 also saw the end of several high profile celebrity relationships. However, one stood out from the rest.
The biggest divorce-related story for 2019 was, by far, the end of Jeff and MacKenzie Bezos’s 25-year marriage. Public statements from both inferred that they had grown apart and were interested in parting on amicable terms. Jeff’s relationship with newswoman Lauren Sanchez, however, created speculation on the true nature of their separation.
The Bezos’ reasons for separating were certainly overshadowed by the bigger story – the financial impact their divorce would have on both spouses as well as Amazon.com, the company they created together.
As the richest man in the world at the time, Jeff Bezos could have been deeply impacted by the divorce settlement and any stock awarded to MacKenzie. The future price of Amazon’s stock was carefully considered as part of the overall settlement agreement.
By giving up too much of his Amazon stock, Jeff Bezos’ control over the company could have been impacted. Since giving up control could have meant a change in the company’s future, awarding MacKenzie too much of the couple’s stock may have resulted in a small financial settlement for her.
Although MacKenzie Bezos was legally entitled to 50 percent of the couple’s Amazon shares, she walked away with approximately one quarter. While Jeff Bezos retains a 12 percent stake in the company, MacKenzie will control just 4 percent.
Although that may seem like an unfair ratio, her 4 percent stake makes MacKenzie Bezos one of the richest people in the world with approximately 38 billion dollars in the bank.
Jeff Bezos retained control of Amazon, with his 12 percent holdings putting his net worth at nearly 115 Billion dollars in 2019.
If you are considering divorce in the coming year, it is important to consult a West Michigan divorce lawyer before taking any action. Please contact the experienced divorce attorneys at Johnson Wikander and let us help you through your most difficult time.