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Big Divorce Settlement

Move over MacKenzie Bezos, the world has a new billionaire divorcee. This next one pales by comparison, but following one of the most expensive divorce cases ever, the ex-wife of a Chinese business tycoon has walked away with a $3.2 billion divorce settlement agreement. And yes, that’s Billion with a “B”!

If property division in China is anything like Colorado, this outcome is not surprising. In Colorado the court will divide the marital estate (regardless of the name on an asset) equitably, which realistically means as close to equal as possible in most cases. When most divorce settlements end up with a roughly equal division, a divorce settlement involving a multi-billion dollar marital estate will necessarily create a billionaire. (In Colorado, we call divorce agreements a “separation agreement” (which is curious when we’re talking about a dissolution of marriage instead of a legal separation), but as not every state uses the same terminology, this post uses the “divorce settlement” lingo from media reports).

An Expensive Break Up

The divorce between Chinese pharmaceutical tycoon Du Weimin and his now ex-wife Yuan Liping has become one of Asia’s most expensive divorces settlements. Yuan Liping became a billionaire overnight after she received nearly half of her husband’s stock in his vaccine manufacturing business in the divorce. The stocks were worth over $3 billion dollars according to reporting by Bloomberg.

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Amazon founder Jeff Bezos.

Surprisingly, this divorce is not the most expensive divorce case in history. We wrote about the Bezos divorce last year, and ultimately MacKenzie Bezos “settled for” a $38 billion settlement – a king’s ransom to everyone in the world not named Bezos, but only a quarter of the estimated $160 billion fortune at stake. That still made her the 4th richest woman in the world, but given that Amazon was not only founded during the marriage, but she helped to found it, her billionaire status is not surprising.

Although reporting is not clear on the specifics of each case, it’s probably a safe bet to assume Mackenzie Bezos and Yuan Liping received these massive divorce settlements as their portion of the marital estate. Many states and countries have rules defining and dividing the marital estate in divorce cases much like Colorado does.

Dividing the Marital Estate In Colorado

Colorado is a marital property state which means that property acquired during the marriage is going to be considered marital (with some exceptions for separate property or premarital property) regardless of title and should be divided equitably during a divorce. Marital property includes any kind of property (tangible or intangible) so long as it has value including business interests, stock interests, and debts! 

It is absolutely possible that property division in a Colorado divorce settlement could create a billionaire – but only if the marital estate is that large in the first place.

The family law judge will look at all of the marital property and divvy up the assets as fairly as possible, absent an agreement between the parties. Equitable division almost always means a 50/50 split or as close to that as possible. The Court will generally accept an agreement on property division so long as the agreement is equitable and not one sided. If the agreement is uneven, the Court may expect an equalization payment of some kind to even out the imbalance before the Court will sign off on an agreement. 

Under C.R.S. 14-10-113(1), the court can consider a variety of factors in the disposition of property including the contribution of each spouse to the acquisition of the marital property and the economic circumstances of each spouse at the time of divorce. Had the Bezos divorce taken place in Colorado, these factors would have likely played a large role in the division of Amazon stock between Jeff and Mackenzie Bezos since they started the company together. Even if Mackenzie Bezos had not been actively involved in the formation of Amazon, in Colorado, she would have still been entitled to a portion of the stock or its value.

One factor which a Colorado divorce court generally does not look at for property division is marital fault. The judge will not consider one spouse’s bad behavior when making decisions about property or financial matters unless there is dissipation of marital assets.

Dissipation of marital assets is when one spouse squanders or gives away marital assets. If a husband spends a crazy amount of money buying a ring for his new girlfriend, a judge may find that the husband has wasted or dissipated marital property. The Court will take that misbehavior into consideration during property division and can offset the lost asset.

For an in-depth look at dividing the estate, see our Division of the Marital Estate Guide Article in the Family Law Guide.

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