October 2, 2023


Parenting News

How Does a $2 Billion Lottery Win Get Divided in a Divorce?

3 min read

Within the U.S. final week, one fortunate Florida resident was the only winner within the Mega Hundreds of thousands lottery jackpot draw, which had a prize price a staggering US$1.55 billion (about CDN$2.08 billion). The winner – who beat the chances of 1 in 303 million – has a selection of a collection of annuity funds spanning 30 years, or else a one-time fee of about US$757 million (about CDN$1.02 million).

Few of us will ever expertise the enjoyment of receiving this type of windfall. Even fewer of us should think about the query of how this type of a jackpot will get break up between spouses within the occasion of their separation or divorce.  

In Ontario, the reply is kind of easy:  The provisions of the Household Legislation Act (FLA) govern how money owed and belongings are divided between spouses within the occasion of a separation or divorce – and this consists of lottery winnings. The FLA says that any property that was acquired in the course of the marriage is taken into account to be “matrimonial property”, and is topic to court-ordered equalization between spouses.  As a result of lottery winnings are thought-about to be on this class, they’re topic to equalization similar to every other asset.

Which means that if in the course of the marriage one partner purchased what turned out to a successful lottery ticket, she or he could also be required to share their winnings with the opposite partner in the event that they divorce. The court docket will think about numerous elements, such because the size of the wedding, the contributions of every partner, and their respective monetary wants, amongst others.

In some circumstances, the spouses might come to an settlement upfront, as to how the lottery winnings must be divided if both of them wins. This may be achieved via negotiation or mediation, or it may be included in a separation settlement or court docket order. However even with such an settlement in place, disagreements typically come up – particularly if the spouses have only in the near past separated and one among them hits it massive.  In that case, a court docket could also be required to decide concerning the interpretation of any contract they agreed to.

And be aware there’s one vital caveat to all of this:  Lottery winnings {that a} partner wins both earlier than marriage, or after separation will not be thought-about matrimonial property, and are subsequently not topic to equalization.

It seems like a easy rule, but it surely’s not at all times easy.

In a current B.C. resolution referred to as Cretu v. Cretu, the divorcing couple didn’t agree about once they separated; this was difficult by the actual fact that they had a couple of residence the place they spent their time both individually and collectively.  The husband stated their separation passed off in 2017.  The spouse claimed it was in early 2019 – pointedly after the fortunate day in January 2019 when the husband gained $2.7 million in a lottery.  This required the court docket to look intently on the totally different proposed separation dates and a few quick durations of reconciliation, after which ask the query of whether or not the lottery winnings have been “household property” on the date of separation, inside the which means of the B.C. Household Legislation Act.

As you see, dividing up lottery winnings within the divorce context may be tough – however in some methods, it’s maybe an enviable drawback to have!

Full textual content of the choice: Cretu v. Cretu, 2022 BCSC 305 (CanLII)

Copyright © All rights reserved. | Newsphere by AF themes.