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What happens if your ex wins the lottery or other windfall?

A divorcing couple recently asked an arbitrator to answer a difficult question: what happens when a husband wins the lottery while going through a divorce with his wife?

The case involved a Michigan couple. The husband separated from his wife for approximately two years when he won the lottery — and he won big. His total winnings were $80 million. After taxes and other fees, financial predictions estimated he would go home with approximately $38,873,628.00.

Did the wife get a share of the winnings?

The couple was going through arbitration, an alternative to traditional litigation to settle the legal matters of their divorce. The wife argued to the arbitrator that a part of those winnings belonged to her. The arbitrator agreed with the wife and awarded her $15 million of the winnings.

The arbitrator explained the finding, stating that because the couple was still married at the time of the jackpot winnings, the award was technically marital property. As such, state law says the wife should receive a portion of the winnings. The husband appealed, and the appellate court ruled in favor the wife as well.

What does this mean?

Since the case is out of Michigan, it will likely result in support for similar findings in similar cases in the state. This is because family law is a creature of state law and cases within the state impact how courts, arbitrators and mediators handle future cases.

It is also important to note that lottery winnings are just one windfall couples going through divorce may need to address. Other financial questions that can arise during divorce include:

  • What if a business owning spouse sells the business during divorce?
  • What if one spouse receives an inheritance?
  • What about large monetary gifts?

The answer will depend on the details of each divorce. As a result, it is wise to seek legal counsel to better ensure all property is considered during the property division determination of the divorce proceeding.

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