September 30, 2023

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

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

In Ontario, the reply is sort of easy:  The provisions of the Household Legislation Act (FLA) govern how money owed and property are divided between spouses within the occasion of a separation or divorce – and this contains 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 profitable 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 components, 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 needs to be divided if both of them wins. This may be achieved by way of 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 large.  In that case, a court docket could also be required to decide relating to the interpretation of any contract they agreed to.

And be aware there’s one essential 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, nevertheless it’s not at all times easy.

In a latest B.C. determination referred to as Cretu v. Cretu, the divorcing couple didn’t agree about after 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 carefully on the completely different proposed separation dates and a few brief durations of reconciliation, after which ask the query of whether or not the lottery winnings had been “household property” on the date of separation, throughout the that means of the B.C. Household Legislation Act.

As you see, dividing up lottery winnings within the divorce context could 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)