As part of the divorce process, separating couples in Lake County and elsewhere must decide how to split up their property. Divorced people often understand their property division agreements in general terms, but it is crucial they completely understand the details of what they agree to. The penalties for not doing so were illustrated recently when a high-ranking bank executive was ordered to pay $750,000 in interest after he made a divorce settlement payment, but didn’t make it in compliance with his agreement.
Brady W. Dougan, the chief executive of mega-bank Credit Suisse, recently lost an appeal to have the interest amount lowered. The trouble started when he made a divorce settlement payment in 2006, but made it 12 days late. Under the terms of his property division agreement, the interest on the payment was calculated back to the date the original settlement was reached, bringing the tab to $750,000. A court agreed with his wife and, in a 2007 decision, ordered Dougan to make the payment.
Dougan tried to argue that he was late only with half the payment and so owed only $12,000 in interest. On Monday, though, an appeals court upheld the 2007 order, opining that since Dougan was a financially sophisticated and highly educated professional, he should have understood how his property vision agreement worked.
Naturally, most Illinois couples who are divorced are not quite as wealthy as the Dougans. Still, his story goes to show how important it is that both parties to a divorce understand the ins and outs of their property division agreement. Working with your attorney to make sure you fully comprehend the agreement that has been negotiated and what your future obligations will be will help to avoid costly mistakes going forward.
Source: The New York Times, “Credit Suisse Chief Penalized in Divorce Case,” Kevin Roose, 27 June 2011.