I am not an expert.
I suggest your spouse contact the lawyer and review the agreement that settled the issue.
The answer may depend upon whether or not the house sale was part of the estate or not.
My Opinion (based upon limited info):
Since Jack was the owner of the house, and Jack sold the house, Jack is responsible for reporting the sale, and any capital gains or losses, unless the settlement agreement stated otherwise.
How does your wife report the money? The attorney should be able to provide guidance on this.
The best case scenario for your wife would be that since Jack was the owner, the payment to your wife could be considered a gift, which I think would not be taxable to her (but depending on the amount, could be taxable to Jack.)
I hope this helps.
