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When a person gets divorced all of the property and debts will be divided equitably or roughly equally unless one spouse can prove that the property is their separate property and should not be subject to division.  I recently came across an interesting case that addressed this issue.  In that case, the divorce was dragging on for more than a year, the spouse's were separated and had separate bank accounts.  Before the divorce was finalized, one spouse hit the lottery and won several million dollars.  The winning spouse claimed that this should be considered his separate property and not surprisingly the other spouse claimed it should be considered marital property subject to division.  This blog is written to generally address what happens to lottery winnings or other property that is acquired by one spouse before they are fully divorced.  If you have questions about your own situation and property division, please do not hesitate to contact us to schedule a consultation by clicking on this link or calling (248) 608-4123.

What Happens If One Spouse Wins The Lottery During A Divorce?

Most property that comes to either spouse while they are married is going to be considered marital property unless it falls into one of the specific categories of property that is considered the separate property of one spouse.  This means that when a person gets divorced, all of the property and debts will be divided equitably or roughly equally divided, unless one spouse can prove that the property is their separate property as defined under the law.  It typically does not matter whether the parties are separated because the Michigan family courts while consider them married until the divorce is finalized.  It also does not matter whether one spouse purchased the property or whether it is titled solely in one spouse's name and not both.

In this particular case, the trial judge and the Michigan Court of Appeals basically determined that because the parties were not yet divorced that the lottery winnings were joint marital property subject to an equitable division.  The court decided that this was the case despite the separation of the parties and their assets.  The court found that after taxes the winnings amounted to approximately 15 million dollars and the winning spouse had to pay approximately seven and one-half million dollars to the other spouse.  I am sure this was a hard pill to swallow for the spouse that won the lottery.  However, the court's decision does appear to be in line with the precedent in Michigan that any property obtained by one spouse during the marriage will be considered marital property subject to division unless the spouse can prove that it is one of the very limited specific categories of property that the court has deemed to be separate property.

This blog was written to generally address the issue of property division in divorce and provide an example of how lottery winnings will most likely be divided in a divorce or separation.  If you have questions regarding divorce or separation, please contact us to schedule a consultation by clicking on this link or calling (248) 608-4123.