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What’s a Last Name Worth in Divorce? If It’s Gates, a Lot

May 12, 2021, 8:01 AM

If you do not know who Melinda Ann French is, that’s okay; many may not. It may help if you were told that she is also known as Melinda Gates.

As we know, Bill and Melinda Gates are divorcing. They are doing so in a state with community property laws, a legal system that presumes joint ownership of all assets acquired during the marriage. We also are very much aware that the Gates fortune is valued at over $145 billion. A question to ask is—what is the value of the Gates name?

Taking the surname of a spouse has been a custom for centuries, and states have different presumptions with respect to the effect of marriage on a spouse’s last name. In some states, marriage does not change one’s name legally; in others, there is a legal presumption that a spouse’s name is changed by a validly issued marriage license or by changing documents such as driver’s licenses, Social Security cards, and passports.

Court cases have decided the proper designation of a child’s last name (between battling parents), whether a person was forced to take a spouse’s surname during marriage, and whether a spouse can continue to use their birth surname during the marriage. The question of the economic value of a marital surname, however, and the extent of its use once that marriage has ended (if not decided in a divorce proceeding), remains essentially an open question.

A Surname Worth Potentially Billions

Of course, an agreement entered into before the marriage or a divorce decree can determine the use of a surname, as could an agreement during the marriage or after separation. There are reports that the Gates consented to a separation agreement. Melinda Gates did not, however, make a request for a name change in the petition for divorce.

In their professional livelihoods, married persons use either their own family surname, a combination of both their family surname and their spouse’s surname, or just the latter. They may choose to use any of these combinations in a personal setting, too.

Sure, the use of the name can be considered as incidental relief in a divorce proceeding (along with property division, child support and child custody), but does the former spouse’s acquiescence to the use of the surname post-divorce or the omission of the matter in a divorce entitle the other spouse to use it, professionally? Can that tacit consent or omission also deny the originally named spouse the right to any revenue from that use?

There are academic concerns on this issue, yes. However, when you’re talking about the value of a surname in the billions of dollars, the question arises as to what is the nature of the surname’s use? Is the name a property right? Does the use during the marriage within the professional versus personal arrangement matter? Can the former spouse seek a portion of the revenue from future business earnings because of the use of the surname by the other spouse?

The value of the name can be likened to estimations of brand or name recognition to market a new good or service under the Gates name. This could be valued considering the net worth of the Gates general wealth standard and total asset value of the Gates Foundation.

Certainly, you or I cannot go down to the courthouse and have our name changed to a famous person’s name; that would be deceptive or construed to profit off of the work of someone more invested in a name. State law is pretty clear that a request for a change of name to that of a celebrity to purportedly profit off of it would be scrutinized more carefully by courts so as to avoid fraud.

Marriage, however, and the customary taking of a spouse’s last name by the other spouse is ensconced in many legal cultures. While this custom celebrates the conventional idea of the union of two people in a marriage, it presents a controversial issue when dealing with the name’s ability to generate economic value when that union no longer exists.

Treating a Name Like Property—Valuing It as Goodwill

Melinda French Gates is a generous philanthropist and was likely important to the growth of the Microsoft fortune. Even with the separation agreement, business pundits, family law attorneys, and legal scholars are opining about how the property division between Bill and Melinda Gates may impact the future of Microsoft and the Gates Foundation.

But who’s to say Melinda Gates won’t come up with the next big thing on her own? And on the advice of a marketing strategist, perhaps use the name she’s used for over a quarter-century? Would Bill Gates have any claims to the fruits of that use? Property assets, in most divorce proceedings, are divided upon dissolution of the marriage, and without an agreement otherwise, in a way that the court deems most equitable and as close to 50-50 as possible.

Related to that division, the assets that produce revenue belong to the owner of the asset. Can we treat people’s last names the exact same way if it’s expressly mentioned in a divorce proceeding? If not, does the former spouse have a right to stake a claim on the surname’s use at any point in time after the divorce? They can’t, of course, if it is expressly laid out in a divorce judgment. For example, Tina Turner reportedly asked the judge to allow her, as an incident of her divorce from Ike Turner, to keep the Turner last name. The question is, what if it isn’t and what relief, if any, does the former spouse have to any profit from the name’s use?

One solution worth exploring is valuing the use of the surname as a business asset, akin to goodwill, and then yes, treating it as an item of property subject to division or conditions either agreed to by the parties or pronounced by a court. State courts have often dealt with the thorny issue of valuing goodwill for former spouses’ co-owned business enterprises but no cases have spoken to the issue of the value of a surname. Married couples’ business endeavors and valuation of those endeavors’ goodwill more generally has come up in divorce proceedings in marital division cases (enterprise goodwill v. personal goodwill) often enough—most recently in a South Carolina Supreme Court decision, Moore v. Moore.

Beyond that, what’s in a name is the recognition value of it.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Greg Bordelon is an associate professor at the University of Maine School of Law. He teaches legal methods & reasoning and the legal environment of business.