I won the lottery in my divorce! Do I have to share it? MI Property Division Law

In today’s paper I read: “Pontiac man who won Mega Millions during divorce case during divorce case must share with ex-wife”. To the average person, the headline may seem shocking, however, to the sophisticated Michigan divorce lawyer who understands Michigan property division law, the decision is not.

https://youtu.be/DZ9CZLDM4L4

A. Background

Richard and Beth Zelasko were married on October 23, 2004.

Beth filed for divorce in September 2011. The parties agreed to submit the divorce action to binding arbitration. Arbitration is a contract which allows a neutral third party to make decisions about a case instead of a judge and is often a hybrid between mediation and trial.

On July 5, 2013, Richard won $80 million dollars in the lottery. After taxes and deductions, his lottery winnings totaled over $38 million dollars. In deciding the case, the arbitrator awarded Beth $15 million of the lottery winnings in accordance with Michigan property division law and Richard appealed.

B. Legal Arguments – Michigan property law.

As a general principle, Michigan property law provides that property earned during the course of a marriage is marital property subject to division in a Michigan divorce.  Richard argued that since he purchased the $80 million dollar winning lottery ticket 5 years after the parties separated and the the marriage ended when the parties separated.

In the case of Wilson v. Wilson, in dispute was one parties’ settlement in a personal injury action. The trial court reasoned that since the parties had no romantic relationship for several years the marriage effectively ended and refused to divide the personal injury proceeds.

The Michigan Court of Appeals reversed the trial court in Wilson stating that acts seen by the trial court as ending the marriage were insufficient without some ‘external public manifestation of the parties’ intent to live separate lives such as moving out or filing a complaint for divorce. Applying the Wilson decision to the lottery case, Richard would win because the parties were in fact separated.

However, the Michigan Court of Appeals decided in in Byington v. Byington, did totally agree with the Wilson decision that any manifestation to lead separate lives as evidenced by the filing of a complaint for divorce or separating would end the marriage in the context of Michigan property law. The Byington court reasoned that the rigid rule is contrary to the long standing Michigan property law that: “property earned by one spouse during the existence of a marriage is presumed to be marital property.” Although the Byington court agreed that separation may be a basis to apportion the marital estate differently it is not automatic.

In determining if dividing the estate as of the dates of separation is fair, the court should consider:

(1) duration of the marriage, (2) contributions of the parties to the marital estate, (3) age of the parties, (4) health of the parties, (5) life status of the parties, (6) necessities and circumstances of the parties, (7) earning abilities of the parties, (8) past relations and conduct of the parties, and (9) general principles of equity. 

In the Zelesko lottery case, the arbitrator applied Michigan property division law and determined that the winning lottery ticket was not the first lottery ticket Richard purchased during the marriage. As a result, there were also losses throughout the marriage (before the parties separated) which were incurred jointly incurred. In applying the factors, the Michigan Court of Appeals determined that the arbitrator correctly applied the Michigan property law factors in deciding that the lottery winnings should be shared jointly.

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I have been exclusively practicing divorce and family law in Michigan for over two decades. The attorneys at Findling Law all share the core value of practicing law to help people navigate change in their lives, without compromising principles.  We specialize in high socio-economic, high-profile and high-conflict cases, while also working with clients of all backgrounds. We recognize that the most important aspect of the practice of law is the application of the law to your specific circumstances.That is why we provide more free information on divorce and family law than any other Michigan law firm. We want to help you manage your situation. Allow our exceptional legal team to help you navigate the change in your life, without compromising principles.

By:  Daniel Findling

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