A Change of Economic Circumstances: When a Party Hits the Lottery

lottery ticket

After a divorce is filed it is not uncommon for one of the parties to claim that they are no longer self supporting and have suddenly become indigent.  It is a much rarer issue when one of the parties suddenly becomes rich.

 

Two recent cases illustrate what happens when one party wins the lottery.  Prior awards of maintenance, child support and even attorneys’ fees have to be re-evaluated.

 

In New York, after receiving an award of temporary maintenance, pendente lite attorneys’ fees and a disproportionate share of the statutory add-ons to child support, the wife/mother “discovered” she had won a lump sum payment of $623,000 in the lottery.    As a result of the sudden change in circumstances, the husband moved to vacate the court’s prior support order.

 

As reported in Divorce: New York, the sizable lottery prize “was a change of circumstances warranting modification and vacatur of the order for temporary maintenance.” Therefore, the court terminated the maintenance payments, retroactively.  The court gave the husband a credit for all payments made after he made his motion.

 

In addition, since the wife was no longer the “less monied” spouse, the prior counsel fee award to the wife was vacated.    In fact, had the husband made a proper request for fees (his motion was deficient), the court may have ordered the wife to pay counsel fees to the husband.

 

Though New York’s child support law provides that the Court may allocate a proportion of non recurring payments from extraordinary sources, including lottery winnings, to child support, the Court noted that it  “has discretion to exclude non-recurring payments from a party's gross income for child support purposes.”  Instead of reducing the basic child support payment, the court reduced the father’s portion of the statutory add-ons from 77% to 50%.

 

The Huffington Post details another case where the winner of the $338,000,000 power ball jackpot was in arrears in paying child support.    By law, the child support arrears will be satisfied before the lottery winnings are paid out.

 

Realistically, the $29,000 in arrears will be a drop in the bucket considering the lump sum prize payout will be $152,000,000 after taxes.

 

Expect the child’s mother to seek an upward modification based upon the winner’s drastically changed circumstances

 



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