What can seem like minor details in a divorce negotiation can end up costing one partner millions, as was recently seen in a Massachusetts divorce case, according to one of the lawyers involved.

The details of any breakup, be it marital or business, need the full attention of a financial advisor in conjunction with a lawyer, said Robert J. O’Regan, a partner at Burns & Levinson in Boston, and the attorney for Craig Irish, who has been involved in a seven-year legal battle with his ex-wife, Dawn, both of whom were from the Boston area.

Craig won the right in a Massachusetts Appellate Court ruling May 24 to retain all of a $20 million payment he received from his former employer after the divorce. His ex-wife argued she deserved a portion of that payment, in part, because Craig Irish had been hiding assets from her at the time of the divorce and the payment should have been part of the divorce proceedings.

Sean T. Carnathan, partner and founder of the Boston law firm, O’Connor Carnathan and Mack and the attorney for Dawn Irish, declined to comment on the case while the firm is considering legal options for its client.

Advisors and lawyers should consider all of the possible “what ifs” when negotiating an agreement for any type of breakup, Regan said. “In this case, whether the money was future income or an asset leader to be received at some future time should have been determined during negotiations [and it wasn’t]. Future income is not divisible in the divorce but a current asset is.”

Regan said he would tell advisors and partners that “doing something down and dirty [the easy, cheap way] during negotiations may get even dirtier in the future. Take a little care and caution now” to avoid problems in the future, he said.

In the Craig case, the Appellate Court precluded Dawn from sharing in a $20 million bonus he received two and a half years after the parties' divorce. The case has been winding its way through both federal and state courts for seven years.

Craig received a $20 million payment when the closely-held company he worked for was sold two and a half years after the parties' divorce. In the divorce, Dawn received a portion of the 6 percent interest in the company that Craig had acquired during his years of employment. The company manufactured, sold and serviced control equipment for nuclear power plants.

The Appeals Court said Craig's interest in the company was disclosed during the divorce negotiations and Dawn’s claim that she was not fully informed of the extent or value of the husband's equity," was unfounded.

 

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