Commentary by Samy Dwek, Founder and CEO, The Family Office Doctor
and White Knight Consulting
We’ve seen in the press today articles about the Bill and Melinda Gates Foundation. It was a foundation that they started with a very clear purpose and focus on helping third world countries, eradicating certain diseases, and researching diseases such as Parkinson’s, HIV, and others. It’s phenomenal in terms of what they’re trying to do.
Unfortunately, Melinda French Gates and Bill Gates have decided to separate. How does this impact the family foundation? Yes, they’ve grown apart. They’ve decided to separate their ways amicably. Clearly, their focus points and their desires of what they want to accomplish are different.
The problem is, in most family foundation trusts, people don’t plan for what happens in case of divorce. That’s not in the planning and maybe it should be. Maybe it’s something we need to think more about and discuss more openly. Not that we are preempting or provoking; we should be planning in case of such an eventuality.
The Gates Foundation currently has close to $50 billion. It’s not an insignificant amount of money, and they’re talking about adding another 15 to $20 billion. So again, these are significant amounts of money that can have a major impact on the focus points that these two individuals have.
So how do they go forward? What’s been very interesting is that Melinda French Gates has decided that she’s going to stay on for two years. Let’s see whether they can make this work or whether they fail to get along or see eye to eye on the objectives of the foundation.
Bill Gates has agreed in principle that they will set aside new money into a new foundation controlled by Melinda French so that they can then continue their missions. What does that mean for family foundations? I think they need to have those discussions. They need to put planning in place.
What would happen if this eventuality should occur in your family? How would it impact your family foundation? What mechanisms do you have in place so that you could separate those funds? It doesn’t have to be just in the case of divorce. It could be brothers or sisters decide that they want to go in different directions.
So what mechanisms have you put in place? It’s something to discuss with legal counsel, something to think about because at the end of the day, we’re human beings. We have different ideas and we grow in different ways. But if we’re creating a family foundation, if we’re trying to help benefit others and pass on the goodwill, let’s make sure anything that happens to us doesn’t negatively impact them.