Win A Million, Donate It, then File for Bankruptcy

Winning a game show is one way to become a millionaire. However, this story has a twist since the millionaire has become bankrupt, within 2 months!

In September, a state school superintendent Kathy Cox had won the $1 million grand prize on the game show “Are You Smarter Than A Fifth Grader?” and pledged to give the money away to various schools. Fast forward a mere 2 months and now, due to the failure of her husband’s home building company, the family has been forced into bankruptcy. Ouch!

As a general lesson, this story is a reminder of how fragile anyone’s financial situation is, basically at any point. For many people, all that it takes is a loss of a job, a bad day on the stock market, a strong recession, or an illness to wipe away their fortunes.

Mrs. Cox will still honor her pledge to provide her winnings to the schools, by offering the money as “gift foundation”, thus protecting it from creditors. Since the family’s assets were valued at about $650,000 but the liabilities were estimated at $3.5 million, it is safe to conclude that keeping the million would still have resulted in a bankruptcy.

The conspiracy theorists among us would believe that this was the reason for donating the prize all along. The mother Theresas among us would believe this was a truly innocent, but large, donation.