Episode 98 - How to Deal with Lottery Winnings, Inheritances, Personal Injury Awards in a Divorce?
Leh Meriwether: Welcome everyone. I'm Leh Meriwether. And, with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. And, you're listening to Meriwether & Tharp radio, on the New Talk 106.7. Here you'll learn about divorce, family law, tips on how to save your marriage if it's in the middle of a crisis. And, from time to time, even tips on how to take your marriage to the next level.
If you wanna read more about us, you can always check us out online at atlantadivorceteam.com. Alright.
Todd Orston: So, did you win?
Leh Meriwether: I'm not telling you.
Todd Orston: You're not telling me? Something tells me if you won that most recent lottery, you wouldn't be here.
Leh Meriwether: I would still be here. I love our audience.
Todd Orston: I would be phoning in from the south of France, I think. But, no. Unfortunately, I didn't win the 1.6 billion dollar lottery. But, I'm not bringing that up for just any reason. What's the topic for our show, Leh, by the way?
Leh Meriwether: Well, the topic is; what does the lottery, and inheritance, a personal injury award, have in common with a divorce?
Todd Orston: Wow! Well, then I gotta tell you, that's ... The fact that I brought that up is pretty timely.
Leh Meriwether: Yeah, it is.
Todd Orston: Wow!
Leh Meriwether: You would think we had put together some notes on that.
Todd Orston: I would think that.
Leh Meriwether: Well, what happened was actually, all the talk about the lottery and everything just, it got us thinking about all the cases that we've had that were kind of started because someone suddenly had this big windfall. And, what's also interesting is the national endowment for financial education said that, "About 70% of people who win the lottery, or get another big windfall, perhaps it's an inheritance, or personal injury award, or something like that; they actually end up broke, a few years later."
And, I think that it goes on to say that a lot of them file for bankruptcy within five years. So, they not only go broke, they go bankrupt.
Todd Orston: Look, we just did a show on celebrities. And, we see that all then time, where you hear about celebrities and/or usually athletes, where they may have been top of their game, but they made poor choices. They didn't get the good help that they needed, the management, and financial direction from experts that they needed. And, they blew millions and millions and millions of dollars. And now, they don't have two nickels to rub together.
And, it's unfortunate. And, it's not that I'm just saying I feel bad for those ex-athletes, I feel bad for anyone who doesn't make the right choices, because a windfall like that should make it so that you and your family never have to worry again. And unfortunately, too many people make, lack of a better of saying, just poor choices that aren't focused on saving, and investing. It's more on spending and enjoying.
Leh Meriwether: Right. A lot of times, interestingly enough, it's giving too. And, giving to the wrong groups. We hear about-
Todd Orston: That's why I wouldn't give any, at all. Especially, not to you.
Leh Meriwether: Well, I would give some to you.
Todd Orston: I feel so bad.
Leh Meriwether: But, you'll see people with ... And, we've seen it. I've seen it in the cases, where somebody got a big personal injury award of five, six million dollars. And, next thing you know, all these friends, they never knew they had, were showing up to their house. And, they're just handing them $50000 here, and $70000 there. And, next thing you know, the five million dollars is down to a million dollar in one year.
Todd Orston: Can I have their address? I'm gonna swing by after the show.
Leh Meriwether: I think the money is all gone now. That was several years ago. But, we see this, and the statistics from this national endowment. I mean, they reflect that too. They reflect what we see; that statistically speaking, if you come into a big financial award, it's likely to be a curse, if you do not take the time to plan things out, really get the help around you that you need. I'm gonna say; help like financial advisors and everything, because as you said, if you deal with it the correct way, that should set your family up for life, where you're gonna be a millionaire. You never have to ... Especially with 1.6 billion dollar. You never have to work again.
Even with, we know, the government is gonna take half. So, if you get, that would be 800 million dollars. The interest alone should cover your bills.
Speaker 3: And, then some.
Todd Orston: I don't know how I would survive. But, whatever. I mean, it's ... I have needs. I'm just telling you. I want at least one space shuttle, and ...
Leh Meriwether: I don't think you can afford that. Ain't that like a billion, at least?
Todd Orston: Well, they're not flying anymore. Maybe I can pick up a used one. I don't know.
Leh Meriwether: I've seen your taste in boats. You would just through it in boats.
Todd Orston: Hold on, we need to take a day dream break.
Leh Meriwether: Oh my! Alright. Well, we're gonna talk about how we see these cases, these big windfalls of money. How they impact families, talk about some of the divorce situations that we have seen come out of it. And also, talk about how courts deal with big one time awards of, whether it be inheritance, or a lottery winning, or a personal injury case. How do courts deal with that when it comes to equitable division, an award of alimony, award of child support, and if somebody does file for divorce around this time, what does the court do with it?
There's an interesting anecdote here, from a case that I read about, 10, 15 years ago, where a woman had won a lottery. And, this may have been in California, which is a community property state, which means that everything is automatically split 50-50. Well, she didn't tell her husband about the lottery winnings.
And, the judge went and granted the divorce and split up their marital assets 50-50. And then, he discovered that she had won the lottery before the divorce was granted, went back to court and the judge was so incensed, that gave-
Todd Orston: 100%.
Leh Meriwether: 100%, to the husband. So, because she lied, she didn't get anything.
Todd Orston: And, I gotta tell you. If I were a judge, I can't say I would do anything differently.
Leh Meriwether: Right.
Todd Orston: Because when you come ... If I were a judge and you came before me, and that issue was presented to me, I too would be incensed. I would be incredibly angry. I would say, "You know what? Why shouldn't I look at it as if you committed a fraud upon this court?" You lied, when you submitted whatever documentation saying, "This is what the estate look like, these are the assets that exist."
Leh Meriwether: You swore under oath to it.
Todd Orston: And, you ignored the lottery winning? Guess what? I'm not gonna ignore it. And, your husband is gonna have a happy day on the way out. But, we see people all the time. And, there's so many things that we need to, or should, dig into, not just how to invest, and how to disclose.
But, there are issues also of how to protect the assets, how to protect from one spouse just walking away with the money. There are safeguards that you should put in place, even when things are good. Dual signatures, things like that, to make it ... We've seen many cases where a windfall comes in, and next thing you know, it's gone.
Leh Meriwether: Yeah. So, that's what we wanna talk about briefly or is that; we see these big windfalls trigger a divorce. And usually, fairly quickly. Sometimes it triggers it because literally the parties had been wanting to get a divorce, but they could not afford to divorce because they couldn't afford two separate households. And, they get the windfall, and that's actually an amicable divorce.
And then, I've seen cases where, really, it was bordering on greed, where husband wins a personal injury settlement. And, what happened was on a ladder, and that ladder collapsed, and it injured a certain part of his body, I won't say what part. But, it's one that's exclusive to men.
Todd Orston: His manhood?
Leh Meriwether: His manhood, yes, injured that. And, a part of the claim was loss of consortium, but he suddenly got a significant award of money. I mean, huge. And, the money went in the bank account, and then the next day, the wife took it out. And, went hired a lawyer.
Todd Orston: That is what we call, in the business, insult to injury.
Leh Meriwether: Yes. Because not only she walked with money because of his personal injury that's gonna impact him for the rest of his life, also when he finds out that the only reason she was having a happy face, was 'cause she was just waiting for this money to come in, and to divorce him. So, I mean-
Todd Orston: So, what did he do?
Leh Meriwether: So, we filed an emergency hearing. We got an emergency hearing. Normally, money is not a basis for a court to grant an emergency hearing. But, because of the amount of the money, and that it was cashed, it could quickly disappear, the court actually gave me an emergency hearing. And, the court ordered that the money be put into an escrow account, an iota account. We actually put it in our iota account to protect it, until the end of the case, when to decide what to do with it.
But then, you have cases where someone comes into an award, and the other side, it may look on the surface like they're being greed, but they're actually not. So, like that case I was telling you about where someone, they'd had a personal injury award, again. And, gotten several million dollars because of a brain injury. And, they were blowing through all the money.
And, the problem was there's a mom over here who has a child, and she needs support. And so, she wanting some of that money upfront, because she knew he was gonna through it all. And, he couldn't work ever again. So, there'd be no way for her to get any support from him. So, next we're gonna talk about that scenario. What the court will do with that one time settlement of of millions of dollars in a personal injury suit. How the court will actually award child support, based on that. So, when we come next, we're gonna get into that.
Welcome everyone. I'm Leh Meriwether. And, with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. And, you're listening to Meriwether & Tharp radio, on the New Talk 106.7. If you wanna read more about us, you can always check us out online at atlantadivorceteam.com. Well, today we're talking about the lottery, that I didn't win.
Todd Orston: I'm not bitter.
Leh Meriwether: They told me, he told me, those were the winning numbers.
Todd Orston: You know what? The person I bought from told me also. And, I think we have a lawsuit on our hands.
Leh Meriwether: Oh, maybe. So, we're talking about how lotto winnings, personal injury settlements, inheritances; how they impact, or what do they have in common with divorces. How do courts deal with them, when they happen. And, we were talking about how a lot of times, we see when one party gets a big windfall, that divorce is not very far behind. Sometimes, literally the next day, unfortunately.
But, what do the courts do when we encounter this, because there's three elements that it comes into. One is; equitable division, or in Georgia it's equitable division. I should say, asset division, if I'm talking about nationally. All the courts divide up the assets that are accumulated during the course of a marriage. Now, some of it, like California, it's a community property state, where everything is 50-50. Georgia and Florida's an equitable division state.
So, every state is a little bit different. And so, if you're getting ready to go through a divorce, you definitely wanna talk to a ... If you're not here in Georgia or Florida, you need to talk to your local lawyer about how they handle it. But, here in Georgia, it's equitable division. That's how they divide everything up.
And, the courts treat the different inheritance differently, than it'll lottery differently than a personal injury settlement, or worker comp settlements. So, we're gonna get into all those things. So, alright. Where do we start?
Todd Orston: I have no idea. I was enthralled, listening to you. Let's talk about the fun one first. Let's talk about lottery. And so, a lottery win, 100% is marital property, okay? And, maybe what we should do right now, just very quickly do a recap on some of the, at least for Georgia, some of the definitions, okay?
When you're dividing assets, you're gonna divide between marital ... Well, not divide. But, you're going to identify assets being either marital, or separate in nature, okay? So, marital or non marital, separate property. Marital is anything that you obtained during the marriage, except though gift or inheritance.
Separate property is anything you had prior to the marriage, and anything that you get through gift or inheritance, through the marriage. And, there's a lot of nuances-
Leh Meriwether: And, there's some other nuances. We'll get into a few of those nuances.
Todd Orston: Exactly. So, when you're talking about equitable division, equitable division is, the way I define it, what is far and reasonable under the certain circumstances, or specific circumstances of your particular case.
Leh Meriwether: Which doesn't mean necessarily 50-50.
Todd Orston: That's right. It absolutely does not mean that. It could mean, and often it does mean 50-50. Often times, or a lot of times, it also means 60-40, or 55-45, whatever. It's whatever is far and reasonable. So, when you're looking at it now through that lens, a lottery win is 100% marital, because-
Leh Meriwether: There's nothing separate about it. It is marital; it was purchased during the course of a marriage, the lotto tickets. And, there's nothing to make it separate.
Todd Orston: That's right. And, I gotta tell you, so many people will come, they'll talk to us, and they'll be like, "Well, I worked and I earned. And, it's my money, my money, my money."
Leh Meriwether: I set aside all that money in the 401K, came from my salary. Well, it was a result of marital efforts. I mean, efforts you can say, "Well, it's my individual ..." Well, the courts, when you're married, they look at you, and your spouse as one unit. Not you individually. The title doesn't matter in most states, especially here in Georgia. That whoever name's is on the car, or the house, or the 401k statement. Doesn't matter. The question is; was it accumulated during the course of the marriage. And, there's a sub to that; was it a result of marital efforts.
Todd Orston: And so, lottery again, fall squarely into the marital column, if you will; because it is something that was done during the marriage, arguably. And, you wanted-
Leh Meriwether: I just realized, I wonder what would happen if somebody got an inheritance, and took some of that inheritance to buy a lottery.
Todd Orston: I know. I was thinking the exact same thing. I didn't wanna go there, because I think we need a show just based on that. But, yeah. Or separate property. I was thinking of it in terms of they have some kind of a separate asset, they go and they buy a lottery ticket-
Leh Meriwether: Would that make it separate property?
Todd Orston: Would the winning constitute a separate asset, because it was a transfer of one separate asset, to create another asset. So, anyway, to our audience, I'm sorry. And, we'll get back to you with answers on that.
Leh Meriwether: But it is an interesting question.
Todd Orston: It is a interesting point, because-
Leh Meriwether: But, we've never had it happen before.
Todd Orston: Because, since you bring that up, let's at least explain that. If you have, lets say, a separate asset, if you have an account, and in that account is $10, and you had that account before you got married. And then, you get married. And, let's say fast forward five years, 10 years. You still have that account, and that same exact $10 sitting in that account.
Leh Meriwether: It now has $10.50.
Todd Orston: Yeah, right, exactly. Or and three or five cents, whatever. But, now you've got that same exact $10, you haven't put money in, you haven't taken money out.
Leh Meriwether: You haven't changed the name on the account.
Todd Orston: That's right. Everything is the same, then you can say that's my separate property. Now, I you have that $10 in that account, you get married. And, from that point forward, you deposit your income, and you take money out, and pay bills, and you put money in from your work, and take money out, put money in, and so on and so forth.
And, 10 years goes by. And then, you have $10, let's say just it just so happens. You have $10 in that account. You say, "Well, that's my $10. It's my premarital account. That's my $10." No. You cannot say it's the exact same $10 that you had back then, that you have now.
Leh Meriwether: And, the court's gonna pretty much say you co-mingled the funds.
Todd Orston: That's right.
Leh Meriwether: So, you lost your separate property claim.
Todd Orston: Right. So, here with lottery, you have to understand it is 100% a marital asset. You bought the ticket, that nuance we were talking about, like I said, that would be a deeper analysis. But, assuming you didn't use separate property to buy the ticket. You buy the ticket, you win the lottery. It is now a marital asset. It is subject to division.
Leh Meriwether: And, I will say this. So, the courts, let's say that hypothetical, the courts said, "Well, fine. I'll find that your lotto winnings are your separate property 'cause you purchased with a separate account." Proving that, I think will be very difficult, 'cause you only lotto tickets in cash.
But, let's assume that the court did that. The court has the ability to award lump sum alimony. So, let's say, you got an award of a million dollars, or the person did and they were claiming it was their separate property. The court could actually say, "But, I'm gonna award this other spouse, $500000 in lump sum alimony." And, they don't have to say where it comes from. That is not a division of the assets. It is simply an award of lump sum alimony, and that's what it's called.
Todd Orston: Yeah. And, you see that more often. Definitely because we don't ... I've never dealt with a situation where a lottery winning amount was deemed to be separate property, unless it was won before the marriage. But, you deal with that where somebody comes into a big inheritance. And, they stop working because they don't need to work anymore.
And, the other party is like, "Well, hold on one second. I need help. I need financial help. Can I get some of the inheritance?" And, the answer is?
Leh Meriwether: No, 'cause it's separate property.
Todd Orston: That's right. "So then, therefore, what can I do? I need help." Okay, that's fine. We can't get you any of that inheritance, but what we can do is go after alimony. We can establish to the court, you have a financial need, you're dependent on your spouse for your support and maintenance.
And, when they say, "But, hold on one second. I'm not working. I don't have any income with which to pay support." Then the court can say what?
Leh Meriwether: They can look at your inheritance, and say, "Actually, you do have the ability to pay some support." And, award it, based on you overall financial situation, regardless of the equitable division. Because the analysis from the support stand point is different than the analysis from the equitable division stand point.
So, that's what people need to understand. The courts may not be able to divide up a separate property, inheritance. But, the court can take that into consideration. Even in equitable division. Now, a lot of times, they don't. And, I think it depends on the amount of money, frankly. 'Cause it's equitable, the court is looking at things.
But, look. You've got one example. I'll give two ranges. So, you got a situation where someone inherited $100000. Well, I've seen where the courts go, "That's her mama's money. And, we're not gonna take that. That's not fair. She keeps that 100, and we split everything else 50-50." But then, I've seen the other ranges, where someone inherited three, four million dollars. And, the court said, "Well, you've got you three, four million dollars, I'm gonna give her 95% of the marital estate. I'm giving you your car, or whatever."
But, I mean, the court can, because they say, "Well, that's fair because you're walking away with three million dollars."
Todd Orston: Yeah. The estate could be worth $100000, let's say. By the time you sell assets, and whatever. And, the court says, "Hold on one second. You have four million in the bank that I can't touch." I mean, the court can't award her any portion of that. "And therefore, I'm gonna give her 90000, and you get your four million, and $10000." I think that's a pretty fair split. Again, equitable doesn't need to be equal. It's what the court feels is fair.
Leh Meriwether: So, the court's given a lot of discretion on how to handle these big one time awards. So, if you think you're gonna be able to walk into court and just have your cake and eat it too, maybe not.
Next we're gonna talk more about how the courts handle these big, one time awards of cash.
Welcome everyone. I'm Leh Meriwether. And, with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. And, you're listening to Meriwether & Tharp radio, on the New Talk 106.7. If you wanna read more about us, you can always check us out online, atlantadivorceteam.com.
Well, today we've been talking about the fact that Todd and I didn't win the lottery, neither of us did. And, how Todd would abandon our audience, had he won it, and I wouldn't have. No, just kidding.
Todd Orston: I just would've phoned in. From some place warm and tropical.
Leh Meriwether: Not. Seriousness, we're talking about what we've situations where someone gets a big financial windfall, that they didn't necessarily earn. I think that's the key thing, because we've seen situations with someone sells a business. Well, they've worked all those years, so that wasn't necessarily a big windfall. They just got a lot of cash, but there was a lot of work involved to build up that business, to get that money.
These are ones where you just suddenly, money comes in, and there wasn't a lot of physical effort to obtain it. And, people can tend to look at it differently. It can trigger divorces. And then, we're talking about, how do the courts deal with it? From the stand point of how do they divide up these different kinds of big awards. And, how do they deal with it for support, 'cause the court has to address that, in every case.
Well, we left off talking about equitable division.
Todd Orston: Right. Equitable division, and mostly as it relates to like a lottery win. Which 100%, we have defined as a marital asset. Doesn't matter whose account it goes into, doesn't matter who bought the ticket, paid for the ticket, anything, alright? It is absolutely, 100% a marital asset, subject to division. How the court's gonna divide it, equitably speaking, it might be 50-50, 45-55, something more or less than that.
Leh Meriwether: It all depends on the circumstances and facts of the case.
Todd Orston: Now, I will tell you; typically, and it's not that we have a lot of experience dealing with ginormous lottery winnings like this, but the court's not gonna feel that one party earned more than the other. So, you might wanna go into that kind of a situation expecting a 50-50 split, because the court is gonna be like, "It's a windfall, it should be a windfall for both of you."
Leh Meriwether: Exactly.
Todd Orston: So now, let's turn our attention to inheritance. Inheritance is much different. Let's say, you're very, very lucky and have some very affluent relatives. And, it's that same 1.6 billion dollars. God! That's ... Anyway-
Leh Meriwether: That's a big number.
Todd Orston: Yeah, it's a big number. But, let's just say it's a big ... I can't even think when I start thinking about this lotto. So, it's a big inheritance, okay? Is the other party, the other spouse, going to be able to get their hands on some portion of the inheritance in terms of equitable division?
Leh Meriwether: It depends. Was that inheritance converted to marital property. And so, in Georgia at least, the courts can look at, "What did you do with that money?" So, let's say for instance, you got $100000. You inherited $200000, you owed $200000, on your mortgage that was in both in the houses in the name of both you and your spouse, and you take that $200000, pays off the house. The court can say, "You converted that to marital property." And, the court can then divide it equitable.
Now, the courts can also say, "From an equitable stand point, I don't think it's fair that the other spouse gets this windfall because-
Todd Orston: Of an [inaudible 00:26:29], or maybe not purely [inaudible 00:26:30], but a decision made by the other spouse to rather than put that money into a separate protected account, to pay off the mortgage, to benefit you guys. So, yeah. There's definitely an equitable argument.
Leh Meriwether: And, I think it also depends on the totality of the circumstances. Meaning like; were they married just a few years and this happened? Not really fair to get suddenly have that be a windfall for the other party. But, if they were married for 30 years, well, I mean that's a log time to be together. And, the court may just split that 50-50.
So, again, the circumstances can change the answer to that question. And, the court has a lot of discretion as far as what it can do.
Todd Orston: Yeah. I mean, the take away, or a take away there, should be, if you're going to be coming into possession of a big asset like that, through inheritance, the bottom line is there are things you can do to protect it, and there are things you could do that can destroy or damage the separate nature of the asset, right?
There are co-mingling issues that we see all the time. Co-mingling is ... To define co-mingling is; basically you are taking ... Let's use that example I used, the $10. And, remember when I said, "You bring that $10 account the marriage. But, during the marriage you take some of the money you earned from your work, put it into the account. But then, you pay some bills out of the account. Then, you put some more money you earned into the account."
You've now mingled, you've now mixed the marital money that you're earning during the marriage, with the separate property money that was already in the account. And, money doesn't have a unique identity.
Leh Meriwether: Right, it doesn't.
Todd Orston: I mean, it does, but nobody looks at the serial numbers on a dollar. So, if you have a dollar in the ... Sometimes the example I use is, we'll have a big bowl of candy. And, it's all the same candy, let's say. And, I'll take one piece of candy out, and I'll say, "This is your piece of candy, you just inherited this." And then, I'll take it and I'll throw it into that bowl. I'll mix it up, and I'll say, "Go get that piece of candy." And, I'll say, "I can't, I don't know which one is which." Exactly.
So, now you've mixed them together, and you therefore, very potentially, if not probably, destroyed the separate nature of the money that was in there.
Leh Meriwether: Right. So now, let's talk about personal injury awards, or a worker's compensation award. Now, this is an interesting animal because there are portions of this that are considered separate, and there's portions of it that may not be considered separate.
So, let's say you got a personal injury award. We can talk about the different types of awards, but we'll just stick with the personal injury award for now, 'cause that's the one we see most commonly. And usually, a personal injury award is made up of payment suffering, lost wages, potential loss in earning income, maybe some disability, reimbursement for healthcare expenses-
Todd Orston: Or like the example that you talked about. The loss of consortium.
Leh Meriwether: Yes. Sometimes includes that, which is ... Belongs to the other party. And so, what will happen is, the courts a long time ago, there was a case that came out, decades ago, that said that, one spouse should not benefit from the pain and suffering of the other spouse. And, with that case, the George Spring court said, basically; a personal injury settlement, the pain and suffering portion of the personal injury settlement, is separate property.
Now, but if you have lost wages, 'cause you're unemployed for several months, that is a marital asset because if you hadn't been in the accident, you would've earned that money that would've gone to pay some bills. And so, that is considered marital. If you're reimbursed for medical bills, so let's say you had a high deductible and you paid $5000 out of pocket for three years, and then you got $15000, part of that personal injury settlement, it can be argued that's marital, 'cause marital funds went to pay for the hospital bills, or whatever the medical bills were.
So, those are all taken into consideration by the courts. Now, the big challenge is, when things are settled, it's usually just a lump sum settlement for the award. So, let's says, "Well, here's $500000 for your injury." But, it doesn't designate what's for pain and suffering, it doesn't designate what's for future medical bills, it doesn't designate what's for lost of consortium, which if you don't know what that means. So, if you have husband and wife, and the husband gets injured and can't engage in sexual relations, or even take care of things around the house. And, the wife loses the ... What do I wanna say there?
Todd Orston: That partnership. That emotional ... We're struggling here. If there ain't no playing going on, then-
Leh Meriwether: There's a loss of consortium claim.
Todd Orston: There's a loss of consortium, and that spouse can get some compensation for that. Because basically, you injured not only him, but you injured our relationship. But, I think the example you used earlier, with the ladder, was one of those where there was not a clear delineation. There was not a clear establishing of that amount, what portion was pain and suffering, what portion was lost wages, what portion was consortium.
Leh Meriwether: So, what we wound up doing in that case, was going to the original demand letter, that the personal injury lawyer had written. And-
Todd Orston: So, you looked outside the proverbial box there.
Leh Meriwether: And, found that in it, it laid out, this portion of it was for loss of consortium. And so, it's just years ago. And, I wanna say that's what we wound up settling on, whatever they had proffered-
Todd Orston: Negotiated.
Leh Meriwether: Negotiated, proffered to the insurance company, even though the cheque they wrote didn't delineate it. What they were arguing, we settled that should hold true. And so, if you argued to this insurance company that your loss of consortium was only $50000, you can't come to court now claiming it's $250000. And, that wound up hating and settling the case.
Alright. Up next, we're gonna get into, how the courts ... We're gonna focus just on support. So, if someone suddenly gets an award of say, $5 million. Should child support be based on that five million dollar reward, if they only got it one time? And, we're gonna break down how the courts deal with it, and how we've handled it in various cases.
Todd, while we're on a break, let's take a moment to speak, just with our podcast listeners.
Todd Orston: Great idea, Leh. First, thank you for listening. If you're a client of ours, thank you for taking the time to educate yourself. It really helps us, help you.
Leh Meriwether: And, I want to thank those that recently took a moment to review our podcast. We really appreciate it. If you feel like you're gaining a value from this show, please take a moment to post a review. The reviews help other find the show, which allows us to help even more people.
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Leh Meriwether: Welcome everyone. I'm Leh Meriwether. And, with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. And, you're listening to Meriwether & Tharp radio, on the New Talk 106.7. If you wanna read more about us, you can always check us out online, atlantadivorceteam.com.
Well, today we're talking about the lottery, and inheritances, and personal injuries settlements; those big time awards of money, where people just get really excited and suddenly get a divorce.
Todd Orston: It happens. And, we've seen it, and we've seen people make poor decisions, and the money disappears. Or they end up agreeing to things they shouldn't agree to, because they didn't get help from an attorney. And, money goes quickly, more quickly than it should. So, people who should have basically been protected, and taken care of, financially speaking, for a long time, suddenly find themselves in financial [inaudible 00:35:17]
So, in any event, we're trying to focus this show on these types of things because not many people win big lotteries. There are more people, percentage wise, that may be involved in a lawsuit that results in some kind of a windfall. Some settlement or a verdict, where it's a big payoff, or inheritance.
Obviously, there are a lot of people who inherit from a spouse, from a grand parent, from whatever. So, these issues, while it may ... We started the show with 1.6 billion dollar lottery. Granted, one person that I don't like, in South Carolina, who won it all, okay? I'm only kidding. I wish you well. That doesn't often, but the other examples we're talking about do.
Leh Meriwether: Yeah. The inheritances, the awards, the settlements of personal injury cases, worker's comp cases; we hear about those much more frequently. Alright.
Let's talk about how courts handle this from a support stand point. We'll start off with the situation, there a gentleman. He was working. He was in school, and he gets in a bad car wreck, not his fault. But, it causes dramatic brain injury. As a result of the accident, wins a five million dollar award. But, unfortunately, that traumatic brain injury has literally changed his personality. He is giving away money like it was water. And, he's rapidly going through the five million.
Well, he had also had a legitimation case going on at the same time, where he was trying to legitimize his relationship with his son. And, the mom wasn't objecting to that at all. Of course there was issues about custody, because of the way he was processing things. But, we're not getting into that. We're talking about the money situation, because he suddenly during the course of the case, she was of course asking for child support, had an award of five million dollars, but he didn't have any income. He couldn't work, he was never ... I mean, unless something happens, and his brain dramatically heals, he'll never be able to work again.
Todd Orston: But, he had five million dollars, sitting in the bank.
Leh Meriwether: Well, yeah. For a few days. It was three million. So, she was asking for a large lump sum award. And, on the surface, that might look greedy. Well, she's trying to benefit from his injury. No, that's not what it was. Well, there was part of it that was maybe a little excessive. But, the request itself was not unreasonable, asking for money, because the court can then ...
The court, under the Georgia child support guidelines, can look at one time winnings like lotteries. But, the court does not have to say, "Well, you won a million dollars, or wherever it came from. You won a million dollars this year." So, they don't put a million dollars in your income column. What they may do is break it up over a reasonable period of time.
So, maybe it's 20 years, or maybe it's something like that. So, what a court can do is say, "What would a million dollars be paid out in the course of 10, 15 years." Maybe the life of the child, or I should say the childhood life of the child, till the child turns 18. What would that award look like. And then, they can put that monthly figure into the child's worth work sheets. And, it will spit out a number.
And so, in this situation though, the mother was concerned that the injured father, that he wasn't gonna be able to pay in two years, 'cause he would've gone through all his money, and was requesting a lump sum award of child support, arguing like, "In one year, he's gone through two million dollars. And, we can't account for the other million. So, he only has two, of the five million left. And, of some of that, a million was supposed to be for future surgeries, because he was so injured."
So, she was asking, I don't know what the number was, but there was a lump sum request, which the court can actually grant.
Todd Orston: Yeah. And, it is incredibly rare. I mean, this kind of a situation. Obviously, for this man, it's a horrible situation, right? But, when determining the reasonableness of what she's asking for, you have to look behind just the, "Oh, I want money. Give me money."
This is somebody who's responsible, primarily if not sorely, for the upkeep, care and maintenance of a child. And, the other spouse has no ability to earn. And, therefore financially, not just financially but probably also on the parenting side, she's on her own. And so, it's very rare, but the court does have the ability to basically, whether it's impute income, or whatever methodology is used by court, come up with a number and say, "You know what? You need to participate in the raising of your child, or children. And, this is how we're gonna do it. And, thank goodness, you have a five million dollar amount. But, you're blowing through it like nobody's business. So, this is how we're gonna handle this. And, this is gonna make sure that you've participated in the payment of these expenses."
Leh Meriwether: And so, that was interesting. 'Cause in cases where, like even the personal injury award, let's say four of the five million, let's say that was counted as pain and suffering, alright? Well, the court in that situation could say, "Well ... " If it was a divorce situation, the court could say, "Well, that's your separate property. I can't divide it up equitably. But, your soon to be ex-spouse needs some extra support for the care for this child, because you're not gonna be able to."
And, she may not be able to go to a full time job at first. So, the court can say, "Alright. You gonna have to pay her one million dollars in lump sum alimony." And, there's nothing you can do about it. I mean, you could appeal it, but odds of you winning aren't good in that situation.
So, the court again, as we've been stressing, has a lot of discretion in this area. While there are certain laws in place governing these ... how the court from address it from equitable division stand point, the court does have flexibility when it comes to support awards. Not to say the courts will do that.
And, I'm not even sure I have ever seen a court award, there was an inheritance. I don't think I've even seen a court take the inheritance into consideration for the purpose of awarding child support.
Todd Orston: I haven't either, but that's also because in most of these situations, it was an able bodied individual-
Leh Meriwether: Both parties were working.
Todd Orston: Right. That had the ability to pay support, regardless of what assets they receive though inheritance. So, like I said, it's very rare. But, there is the possibility. And so, we've had other parties usually.
Usually, we can communicate with our clients who are in a similar situation. They come into a large amount of money. And, we can explain to them the realities, and what the court can, and might do to keep them reasonable. But, we've see people come in and they were working, they were earning, they come into a large inheritance. The next thing you know, they're unemployed. And, they're trying to play that game of, "Oh, I don't have any income. I can't support. I can this, I can't that."
And, at that point, what the court is going to do is, impute income. Imputation of income means basically, it's a fiction. It's the court basically saying, "You have the ability to go out and earn X amount of dollars per month. You're voluntarily choosing not to. So, I'm gonna pretend like that's your income. And, we're gonna use that income level to set child support, and basically determine what your obligation should be."
So, the court can impute income. We've had many cases, where the other party takes that position, "I can't earn." And, the court says, "Well, yeah, you can. You're choosing not to. But, get out your cheque book, because you need to."
Leh Meriwether: You got money in the bank. I see it.
Todd Orston: Exactly.
Leh Meriwether: You can't hide that from me. But, the other thing is that we didn't touch on, but we probably should just mention is that, let's say you've already gotten a divorce, and you suddenly come into a lottery win. You've won the lottery, and you're receiving alimony, that can absolutely be a basis. Or even a huge inheritance, or a personal injury settlement. Any of those situations where there's a large influx of cash, can be a basis to come back to court to modify your support obligation, or what you're receiving.
So, if you're receiving alimony and suddenly got a big financial windfall, the opposing party, or your ex-spouse, can come in and ask for the amount that they're paying you to be reduced, or eliminated.
Todd Orston: Well, 'cause it's based on need. And so, if you went to court and got alimony in the first place because you didn't have the ability to financially take care of yourself, then it's because of need. You suddenly come into five million dollars, that need is no longer there. It's the same reason why when you get remarried, that acts as a trigger to very potentially and likely terminate the alimony obligation. Because now there's an assumption that the new spouse is gonna step in and provide that level of care that the alimony was supposed to take care of.
Leh Meriwether: Well, that about wraps up this show. I really enjoyed talking about lottos that I didn't win, but it is an interesting subject on how courts deal with it. If you wanna learn more about us, you can always check us out online, atlantadivorceteam.com.
Speaker 4: This audio program does not establish an attorney client relationship with Meriwether & Tharp.