- In a lawsuit, Marie Bosarge claims that her estranged husband, Texas billionaire Ed Bosarge, created trusts "to hide income and property and to hold what would otherwise have been personal income and assets."
- More than just another billionaire divorce spat, the case offers a rare window into the highly secretive world of asset trusts in South Dakota.
- South Dakota is fast becoming a mini-Switzerland for the world's rich trying to shield their assets.
During their more than 30 years of marriage, Texas billionaire Ed and Marie Bosarge accumulated an unusual collection of treasures.
They owned 12 homes, including five properties in Maine and a private island in the Bahamas. They had a 180-foot sailing yacht with its own grand piano. They bought a $5 million Egyptian mummy. Marie bought some of Marilyn Monroe's personal effects, including her furniture, dresses and bras.
"It was over the top," Marie said of their lifestyle.
Now, instead of living the high life, Marie Bosarge fears going under. When Ed filed for divorce in 2017, Marie discovered that almost all of the couple's property — from the homes and island to her jewelry and even some of their tableware — had been put into a special trust that shielded the assets from any claims. Rather than getting half of a fortune she estimated to be worth more than $2 billion, she may wind up with little or nothing after paying her legal bills.
In a lawsuit filed in 2018, Marie claims that the trusts "were created and used by Ed to hide income and property and to hold what would otherwise have been personal income and assets." She claims the purpose of the trusts and the transfer of assets between the trusts was "to cut Marie out of her rightful share of the community estate."
Attorneys for Ed Bosarge — who founded high-speed trading firm Quantlab — declined to comment on the case, citing confidentiality rules. Marie's attorney also declined comment. But in court papers, Ed's attorneys have claimed that the assets are owned and controlled by the trust, not by him, and are therefore not marital property. They say the total value of the couple's marital property, which would be subject to division, is about $12 million.
Marie said that since her legal bills are already well into the millions, "I could wind up with nothing."
More than just another billionaire divorce spat, the Bosarge case offers a rare window into the highly secretive world of asset trusts in South Dakota, a state whose protective trust laws have made it a haven for billionaires and wealthy families around the world.
South Dakota is fast becoming a mini-Switzerland for the world's rich. Analysts and local politicians estimate that $250 billion to $900 billion is now stashed in South Dakota trusts by the likes of Chinese billionaires looking to keep their fortunes out of reach of the government, Europeans looking to avoid taxes and Americans looking to shield wealth from spouses.
Marie said that when she and Ed married in 1989, they had little wealth. Soon after they were married, their house was repossessed. But Ed, an accomplished mathematician and former NASA contractor, eventually found success trading commodities.
In 1998, he and a business partner founded Quantlab in Bosarge's house. Marie said she was one of the first employees, managing the main office in their dining room and smoothing relations between the co-founders and early employees.
As Quantlab grew, so did the Bosarges' wealth. They built a 37,000-square-foot home in Houston called Chateau Carnarvon, which had its own hair salon, massage room, music room and theater. Some rooms were filled with gold leaf, tapestries and paintings.
They had five properties in Maine, one in Aspen and a luxury flat in London. They bought a succession of sailing yachts, including a 180-foot superyacht named Marie. Since she liked to play piano, they had a grand piano permanently fixed to the floor of the yacht "so it wouldn't slide around," she said.
Ed had a fondness for berets and antiquities. They bought $1 million tapestries and a $5 million Egyptian mummy, now in a Houston museum.
Marie, with her high cheekbones, arched brows and blond hair, had an affinity for Marilyn Monroe. She bought an array of Monroe memorabilia, including the actress's hot-pink Ferragamos, the couch that she reclined on during her psychiatrist visits, a table from Monroe's Brentwood, California, home, the red dress she wore in "Gentlemen Prefer Blondes," and some of her bras.
"She was ahead of her time," Marie said.
In 2012, according to the lawsuit, Ed began an affair with a Russian woman. He filed for divorce in 2017 by registered mail, Marie said.
Initially, Marie thought she would get half of everything they owned.
"I thought I would be fine," she said.
Instead, she found out that Ed had been transferring their business and personal assets into a complicated series of trusts — first in Bermuda and then in South Dakota.
Initially, Marie was a beneficiary of the trusts, meaning she would receive income or benefits from the assets. But before their divorce, according to the lawsuit, Ed transferred the assets into new trusts that limited or shut out her interests. In keeping with South Dakota law, he was not required to notify her of the changes, according to the lawsuit.
Marie said she had little knowledge of the trusts during their marriage. She knew Ed had offshore trusts for many his business assets, since, as she put it "he always said only dumb people pay taxes."
But she said she didn't know that their personal belongings — from the yachts and mummy to a diamond necklace he gave her and even their tableware — were also locked up in a trust.
She said when she found out about the trusts, "I cried. I was in tears. I couldn't believe some of the things, you know, that I found out."
"He had a fiduciary duty as a husband to tell me," she said. "I just can't understand how it can be legal."
Yet South Dakota's trust laws may be difficult to challenge. Trusts in South Dakota are perpetual, meaning a wealthy family can put assets into a trust that are held in perpetuity, rather than for a limited period of time. The state also gives trusts sweeping privacy and asset-protections against creditors, business partners, lawsuits or ex-spouses.
Adding to its attraction, South Dakota has no inheritance or capital gains or income taxes.
Marie says she and her attorneys have had difficulty finding even basic details about the trusts because of the state's strict information protections. South Dakota has put strict nondisclosure orders on all the attorneys and filings in the Bosarge divorce case.
The divorce was scheduled to go to trial in April, but has been postponed indefinitely by the coronavirus crisis. Marie said her legal bills have already topped $3 million. When asked what she will do if she gets only enough to pay her legal bills, she said "I don't know. I don't really have a plan."