IF YOU WIN THE POWERBALL LOTTERY TONIGHT AND ARE GOING THROUGH A DIVORCE, WHAT HAPPENS TO YOUR WINNINGS?
Tonight, there is a good chance that someone (or perhaps several people or groups of people) will win the record $1.5 billion Powerball lottery jackpot and join the ranks of Zuckerberg, Gates and Buffett as an American billionaire. As of the writing of this post, the estimated cash payout for a single winner exceeds $900 million. How nice would that be? (Note, if I have the winning ticket, this will be my last blog post. But, if you have been receiving your free legal advice from these posts, do not despair, with the odds of winning around 1 in 295 million, it is, unfortunately, highly likely that you will be hearing from me again.)
But if you do win tonight and are going through a divorce, what happens to your winnings? Does your soon to be ex-spouse get to share in the hundreds of millions of dollars that you will receive? In Maryland, it all depends.
In a 1993 decision by Maryland’s Court of Appeals (the State’s highest court) in Alston v. Alston, the Court reversed a decision by the trial court in which the trial court had awarded the wife of a man who won a DC “Lotto” jackpot of over $1 million dollars fifty percent of the husband’s annual annuity payout. The Court held that although the lottery winnings constituted “marital property” under Maryland law since they were obtained while the parties were still married and the winnings were thus subject to “equitable distribution” by the Court, the trial court did not give enough consideration as to when the lottery was won. Under the facts before it, the Court found that the husband had won the lottery at a time when the marriage “was, for all practical purposes over,” and, thus, it did not believe that an equal distribution of the winnings was appropriate. It further held that there was no evidence before it that would justify any portion of the lottery winnings being given to the wife, so it reversed the trial court’s decision and held that the wife was not entitled to any of the lottery winnings. One million dollars for Mr. Alston, zero for his wife.
However, in a subsequent decision by Maryland’s Court of Special Appeals (Maryland’s intermediate appellate court) in Ware v. Ware, the Court upheld a trial court’s decision to award the wife a sizeable marital award and indefinite alimony after the husband won a $17 million Powerball lottery jackpot. The Court of Special Appeals’ decision distinguished the Court of Appeals’ decision in Alston. In reaching its decision, the Court of Special Appeals found that the relationship of the parties was much different than it was in the Alston case and it was not, “for all practical purposes”, over. Mr. and Mrs. Ware – although separated – were still having sexual relations and continued to do so even after the husband won the lottery. Under these facts, the Court agreed that an award of some portion of the lottery winnings to Mrs. Ware was equitable and it upheld the trial court’s decision to award Mrs. Ware $1.6 million dollars and $3,500 per month in indefinite alimony.
So, in short, if you are a Maryland resident and win the Powerball lottery tonight and are going through a divorce, there is a a possibility that you will have to share your winnings, or a portion thereof, with your estranged spouse. Like so much in the law, it will all depend on the facts of your case.
But, if you are in that situation, rest assured, one thing is for sure: because of the amount of money at stake, there will be a fight over the winnings. (In another Maryland case, a husband moved from Virginia to Maryland, apparently hoping to have a better chance in sharing in his estranged wife's lottery winnings.) And, if you find yourself in that situation, and need legal counsel, please feel free to call me.
Bruce L. Stern, Esq.