When Holly Lahti of Rathdrum, Idaho learned that she won $190 million in
the Mega Millions Lottery, it should have been the happiest day of her
life. Under normal circumstances, TV viewers all over the country could
expect to see Lahti, smiling, and posing with a giant check. Instead,
Ms. Lahti’s joyous win was plagued by a looming court battle with
her long-estranged husband.
Although separated for several years, the couple was not divorced. As a
result, Lahti’s husband may be entitled to a portion of her winnings
under Idaho law. However, in California, income (including lottery winnings)
earned by a person after the date of separation is his or her
separate property. How does one determine what that date is?
California Law on Separate Property and Date of Separation
California Courts define separation as “that condition when spouses
have come to a parting of the ways with no present intention of resuming
marital relations. The fact that husband and wife live in separate residences
is not determinative, although it is usually considered an important factor.
The question is whether the parties' conduct evidences a complete
and final break in the marital relationship”.
Determining what constitutes a complete and final break is often a complicated
task. Since intentions are, by definition, subjective, courts examine
whether the parties' conduct objectively reflects that the marriage is over.
For instance, imagine that a spouse moves out of the family home, and lives
with a new significant other for the next four years. Many of us would
consider this to be a complete and final break-up of the marriage.
Not so, said the California Court of Appeal in
In re Marriage of Baragry, (1977) 73 Cal.App.3d 444. From 1971 to 1975, Mr. Baragry thought he had
the best of both worlds. He lived with his 28-year-old girlfriend but
continued to have dinner at his former home (with his children and his
wife of 20 years) several times a week. He took his wife to social and
professional events and gave her Christmas, birthday, and anniversary cards.
In 1975, Mr. Baragry filed for divorce and claimed that the substantial
sum of money he earned after 1971 was his separate property. The Court
disagreed and ruled that the marriage remained intact until 1975. The
Court may have been persuaded by the fact that Mr. Baragry continued to
bring his laundry for his wife to wash and iron twice a month during the
entire 4-year period that he claimed they were “separated.”
Consult a California Family Law Attorney for Property Division Issues
The moral of this story is that establishing the legal date of separation
can be a complicated factual determination, and one may or may not be
considered “separated,” regardless of one’s living arrangements.
If Holly Lahti resided in California, this might have made the difference
between enjoying a $190 million prize and engaging in a protracted legal
battle with an estranged husband.
At Richard Ross Associates, our legal team can advise you on property division
issues under California Law. Call us at (805) 410-3407 or
contact us online to schedule a consultation today.