In a high asset divorce, the financial stakes are enormous and a few words in a settlement agreement can have a large impact. Recently, news broke that a forgetful moment coupled with a few words in a settlement agreement will cost Credit Suisse’s chief executive more than $750,000.
Brady W. Dougan, of the Swiss financial services company, missed the deadline for a divorce settlement payment by 12 days in 2006. An appeals court has now ruled that he will have to pay a whopping $750,000 in interest for being 12 days late. How did a 12-day late payment result in $750,000 in interest?
As part of Dougan’s 2005 divorce, Dougan needed to pay his ex-wife, Tomoko Hamada Dougan, a total of about $15.3 in two installments. Although Dougan made the first payment on time, he was late on the second $7.5 million payment by 12 days. Their divorce settlement agreement called for interest on any late payments, but the Dougans did not agree on the length of time the interest accrued.
Dougan and his legal team argued that he should only have tallied 12 days worth of interest, which equals the length of time he was late on the payment. After reviewing the exact language of the divorce settlement, the court determined Dougan was responsible for interest accumulated from the date of the settlement, not the date the second payment was due.
Because of the court’s ruling, Dougan is on the hook for one year and 12 days worth of interest, which came out just over the $750,000 mark. The court did not go easy on Dougan, who has degrees from the University of Chicago, saying that both he and his team were financially savvy enough to have recognized the consequences of a late payment.
Source: DealBook, “Credit Suisse Chief Penalized $750,000 in Divorce Case,” Kevin Roose, 27 June 2011
McCourts continue to work on Dodgers divorce settlement
Opening day has come and gone in Milwaukee, as one of the Brewer’s National League Rivals begins a new baseball season with its ownership in doubt because of a prolonged divorce. Although many couples struggle to properly divide their assets during a divorce, few need to worry about an asset as valuable as a professional baseball team during the property division settlement proceedings. However, Jamie and Frank McCourt, joint owners of the Los Angeles Dodgers, are doing exactly that as the Dodgers themselves enter a second season without settled ownership.
Requests from both Jamie and Frank’s attorneys resulted in the postponement of a hearing originally scheduled for April 11. Jamie McCourt is asking that Frank be required to provide her with all of the Dodgers’ financial documentation regarding the teams’ business operations.
The new hearing date is scheduled one month later on May 11. The change will give Frank and Jamie additional time to negotiate the complex property division agreement that could finally end their divorce proceedings, which began in late 2009.
In December, Judge Scott Gordon of the Los Angeles Superior Court threw out an agreement that would have given sole team ownership to Frank McCourt. Jamie McCourt took this decision to mean that she was a half-owner of the team.
At that point, Frank McCourt’s attorneys said that he would pursue a second trial to make the Dodgers his separate property, while Jamie McCourt’s attorneys said that she’d create an investment group to purchase Frank’s interest in the Dodgers. As of the present date, neither party has followed through with these stated intentions, and their attorneys have declined to comment on the negotiations since March 2 when the pair met to discuss the settlement.
Source: Los Angeles Times, “Frank and Jamie McCourt working quietly on a settlement,” Bill Shaikin, 3/29/2011
Prenuptial agreements can protect property in Wisconsin
When people divorce in Wisconsin, their property is divided between them according to Wisconsin’s community property law. Wisconsin’s community property law starts off with the presumption that all property and debts of the spouses that were acquired during the marriage are equally owned and therefore will be equally divided in the event of a divorce.
This poses unique problems for people who own a business. In many situations, a spouse of a business owner will be entitled to a share of the business. This can be so even if the business was established well before the marriage. With that in mind, many people would like to do what they can to protect their business interests in the event of a divorce.
Many people use a prenuptial agreement to protect their businesses in the event of a divorce. However, prenuptial agreements are very complex documents and should only be made with the advice of an experienced family law attorney.
Generally, a prenuptial agreement is a contract between two spouses that specifies what the spouses’ property rights would be in the event of a divorce. The contract must be signed by both spouses before the wedding. In order to be binding, a prenuptial agreement must meet several legal requirements.
Prenuptial agreements must be in writing. Verbal prenuptial agreements are generally not enforceable. The agreements must also be the product of both spouses acting freely and there can be no coercion or force involved. These agreements should also provide for a full disclosure of assets and the signing of the prenuptial agreement should be witnessed.
Importantly, prenuptial agreements need to be fair. These requirements may seem straightforward, however many couples inadvertently create a prenuptial agreement that fails to meet these legal requirements. In order to make sure you have a prenuptial agreement that is airtight, it is important to work with an attorney who is both knowledgeable and experienced in Wisconsin family law.
Source: Forbes.com, “Divorce-Proof Your Business, Even If You’re Still Single Or Happily Married!,” Jeff Landers, 4/19/2011
Couple who divided house with makeshift wall officially divorced
Marital property division can be one of the most complex issues in a divorce. Property division can be especially complex when the spouses have been married a long time and have accumulated substantial assets together. A recent high assets divorce provides a rather stark example of how difficult dividing property can be.
The divorce began about six years ago. In 2005, the wife forced her husband out of their marital home. In August 2005, a family court judge ordered that the husband could move back into the house if he divided it into two units. This required constructing a physical wall in the house.
The wife appealed the 2005 court order requiring the wall. About one year later, an appeals court allowed the wall to be constructed. The wall divided their three-story dwelling by separating the first-story living room from the staircase leading upstairs. The wall went up in December 2006, and the couple has been living together, yet apart, since that time.
The divorce was then delayed due to a change in the law and a bankruptcy filing. Now, after five years, a judge gave his final ruling in the divorce case. The judge ordered that the couple sell the now divided house and two other properties and split the profits between the two spouses. In addition, the husband, the former owner of a factory, was ordered to pay the wife a lump sum of about $1.5 million plus $6,000 per month. However, he can keep several other buildings he owns.
The wife has indicated that she will appeal the judge’s ruling, which could delay the sale of the home indefinitely.
Source: NPR, “NYC Couple Who Split House With Wall Get Divorce,” 4/28/2011
Jamie McCourt would like to force sale of Dodgers
Jamie McCourt is requesting an immediate sale of the Dodgers to avoid a takeover by Major League Baseball. During a divorce with the team’s owner, Frank McCourt, the Jamie was fired, and she now claims that the team is severely mismanaged. Jamie petitioned Superior Court Judge Scott Gordon to order an immediate sale in hopes of obtaining the maximum amount of value for the franchise.
The team is the couple’s largest asset and the subject of an ongoing marital property division dispute, despite the fact that their divorce is already official. Jamie McCourt believes that the sale would be a positive change for the team and its fans, as it would bring in a new owner with differing business strategies than those of her ex-husband.
Judge Gordon has scheduled a hearing on the issue for June 22, during which he will consider arguments for and against the forced sale of the team. The hearing will also cover Jamie’s request to obtain her ex-husband’s financial records. This follows a ruling in December, when the judge set aside a controversial post-nuptial agreement. That decision has caused considerable tension for the franchise itself, as Frank had previously argued that 2004 post-nuptial agreement granted him exclusive ownership over the team.
The commissioner of Major League Baseball has launched an investigation into the failing finances of the Dodgers, suggesting that MLB might have to take over the team if the current management is unable to resolve the situation.
As the divorce between Frank and Jamie McCourt demonstrates, complex property division can be one of the most difficult issues to resolve in a divorce that involves substantial assets. While just about any divorce has the potential to become a hotly contested divorce, achieving a settlement can be quite a challenge when there are significant assets at stake. If you have questions about marital property division in Wisconsin, an experienced divorce attorney can help.
Source: Thomson Reuters News and Insight, “Jamie McCourt seeks immediate sale of the Dodgers,” Mark Lamport-Stokes, 5/19/2011
Husband solves a community property puzzle
The Wheel of Fortune spun and a divorced husband and wife are going to share the prize. Scott Dole will need to share the $51,600 jackpot he won on the popular game show with his ex-wife Carrie Dole.
The question before family court Judge James Rulli involved whether or not Scott’s Wheel of Fortune winnings constituted community property that needed to be shared equally between husband and wife or if the money belonged solely to Scott. Like Wisconsin, the law of the Doles’ home state provides for an equal distribution of assets in a divorce.
Carrie Dole had filed for divorce long before the game show appearance by her husband, but the couple had reconciled their differences at the time the show was filmed. Carrie Dole was living with her husband as a married couple and even traveled with him, staying in the same hotel room during the Wheel of Fortune taping.
Judge Rulli found that the prize money was community property subject to the 50-50 community property law and ordered the winnings to be split equally between the two, saying that it appeared the couple really wanted to be together before and after the prize was won.
At the trial, Scott Dole insisted that he should be allowed to keep the entire jackpot because his wife owed him for her share of an inheritance left to Scott by his late father. The money eventually went toward the purchase of a home.
A film segment showed the couple hugging enthusiastically on camera after the winning appearance. At the time, Carrie Dole testified that she had requested her attorney withdraw the divorce petition.
The $46,988 after-tax final amount was placed in an escrow account pending the outcome of the judge’s decision.
Source: The Seattle Times, “‘Wheel of Fortune’ jackpot split 50-50 in divorce,” Laura McVicker, 5/26/2011
Don’t lose everything when divorcing after 50
Divorce later in life is becoming more and more common. As Baby Boomers in Wisconsin are nearing retirement, many are finding that divorce is an unplanned part of their golden years. In fact, the divorce rate for people over the age of 50 has doubled, according to the National Center for Family and Marriage Research at Bowling Green State University.
Yet, divorcing after 50 can have a devastating impact on your quality of life if you are not careful with your assets. Many of the assets of those in the over-50 crowd are in retirement funds. These, if they are tax deferred, may drop in value when withdrawals are made because taxes will be taken out. Splitting the assets is challenging because of the need to consider these types of issues.
There are some ways to protect yourself from potentially devastating financial decisions. First, you need to be sure that you have legal representation and the advice of a financial planner during your divorce. Both of these will be an asset.
Next, avoid cashing in your retirement accounts during the divorce, if you can. If you make an early withdrawal, you will likely have to pay a hefty penalty. If there is some way you can divide your assets so that the retirement account stays intact, then you may be able to avoid these penalties.
Additionally, make sure you divide your debts in a fair way after your divorce. Pull a credit report on your spouse to ensure you know about all existing debts, even those who might be secret from you. After a lifetime together, it is only fair for the debts to be shared.
Source: Bakersfield.com, “Divorce misstep after 50 can be catastrophic,” Steven Van Metre, 5/13/2011
Baby boomer divorce rates are climbing
A recent study completed by the National Center for Family and Marriage Research shows that divorce rates are climbing up among the baby boom generation in Wisconsin and across the nation.
While most divorce numbers have declined over the past 20 years, the study shows that the divorce rate among people aged 50 and over has doubled.
Some experts suggest that the causes for the increase can be found within the attitudes and abilities of the generation itself. Baby boomers are more likely to have enough money to manage after a divorce. There tends to be less squabbling over dividing the assets because there is usually more than enough to go around. On the other side of the coin, financially strapped marriages can bring about tension that can lead to a divorce.
Infidelity has been identified as a reason that pushes couples apart. Some research suggests that infidelity is the catalyst that pushes marriages to the end in nearly two-thirds of cases.
Children getting older and leaving home also tends to be a major driving factor behind older couples divorcing.
Some experts believe the trend will continue to rise among adults in the 40 to 65-year-old range. Rates, however, are expected to decline as boomers get older.
Baby boomers considering divorce need to evaluate what is going to happen with their assets. Once the assets have had a value placed on them, decisions on marital property division can take place. If you have questions about divorce or property division in Wisconsin, an experienced family law attorney can help.
Source: Fox Business, “Why So Many Baby Boomers are Getting Divorced,” Casey Dowd, 6/23/2011
Mel Gibson and wife reach deal to end two-year divorce case
Over the course of his 28-year marriage, Mel Gibson has accumulated a significant amount of assets. In addition to his wildly successful acting career, Gibson has also pioneered several successful projects as a director. He won a pair of Oscars for his famed 1995 film Braveheart, in which he both starred and directed.
Now, the two-year divorce case between actor Mel Gibson and his wife, Robyn, has finally ended. The former husband and wife reached a deal, which included a marital property settlement dividing the assets the couple shared together.
The divorce proceedings won’t be complete until a family court judge finalizes the agreement, which is expected to happen sometime in August. Details of the settlement between the 55-year-old Gibson, who is estimated to be worth somewhere around $900 million, were not released to the public.
The divorce was initially filed by Gibson’s wife and mother of seven kids back in 2009, following 28 years of marriage. Robyn’s divorce petition cited irreconcilable differences as the reason for the divorce. This all occurred after Gibson’s infamous drunken driving arrest in 2006 in which he exploded into a controversial rant in front of law enforcement.
Gibson continued to be a lightning rod for controversy and legal woes after a 2010 altercation with his then-girlfriend Oksana Grigorieva nearly landed him in hot water. Gibson pleaded no contest to battery charges, received three years on probation and was ordered to receive domestic violence and mental health counseling.
Along with the couples’ seven children, Gibson also has a 20-month-old daughter with Grigorieva who has been the subject of an ongoing child custody and child support dispute.
Source: Australian Broadcasting Corporation News, “Mel Gibson reaches divorce deal,” 6/29/2011
Credit Suisse chief executive pegged with bloated interest bill
In a high asset divorce, the financial stakes are enormous and a few words in a settlement agreement can have a large impact. Recently, news broke that a forgetful moment coupled with a few words in a settlement agreement will cost Credit Suisse’s chief executive more than $750,000.
Brady W. Dougan, of the Swiss financial services company, missed the deadline for a divorce settlement payment by 12 days in 2006. An appeals court has now ruled that he will have to pay a whopping $750,000 in interest for being 12 days late. How did a 12-day late payment result in $750,000 in interest?
As part of Dougan’s 2005 divorce, Dougan needed to pay his ex-wife, Tomoko Hamada Dougan, a total of about $15.3 in two installments. Although Dougan made the first payment on time, he was late on the second $7.5 million payment by 12 days. Their divorce settlement agreement called for interest on any late payments, but the Dougans did not agree on the length of time the interest accrued.
Dougan and his legal team argued that he should only have tallied 12 days worth of interest, which equals the length of time he was late on the payment. After reviewing the exact language of the divorce settlement, the court determined Dougan was responsible for interest accumulated from the date of the settlement, not the date the second payment was due.
Because of the court’s ruling, Dougan is on the hook for one year and 12 days worth of interest, which came out just over the $750,000 mark. The court did not go easy on Dougan, who has degrees from the University of Chicago, saying that both he and his team were financially savvy enough to have recognized the consequences of a late payment.
Source: DealBook, “Credit Suisse Chief Penalized $750,000 in Divorce Case,” Kevin Roose, 27 June 2011
The economy and timing affect financial goals in divorce
One of the primary steps in divorce negotiation is marital property division, and one of the main assets that typically needs to be divided is the marital home. If you have to sell your house during a divorce, the real estate market will determine whether you make or lose money by selling. During a down real estate market, like the one we’ve been seeing in Milwaukee, you could lose most of the equity you have built in the house. To avoid all of this, one party can keep the house and the other can take other assets in exchange for the value of the equity.
The state of the overall economy definitely has an effect on how a divorce can affect you financially. You may have to move, apply for more credit, or even get a new job as a result of a divorce. All of these things are easier to do in a good economy.
If a couple has children under the age of 18, child custody and child support can complicate financial matters. If custody of the children is split between both parents, each one will have to pay living costs for each household, instead of combining their incomes for one household. If one parent has custody, it may become more stressful for the other parent who has to pay child support.
Getting a divorce during bad economic times requires careful consideration and planning. Thankfully, people faced with divorce in Wisconsin do not need to go through the process alone. Experienced family law attorneys are available to help people protect their financial interests through the course of the divorce process.
Source: MSNBC, “The best and worst times (financially) to get divorced?,” Angie Mohr, Aug. 8, 2011