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Lottery winnings and divorce

Mega Millions Lotto winnings and divorce:

New York Mega Millions lottery jackpot is now $171 million dollars! Will you buy a ticket tonight?  Well, good luck, mes amies! Although, I don’t know why you are bothering to play tonight because I am all over that jackpot tonight and it’s mine. First thing I’m gonna do with my winnings? Well, pay taxes. But after that? World cruise, baby. I will see all y’all next year this time. I’m flying immediately to Australia and link up with my boat.  But I promise I will blog from my suite on the Queen Mary II, though. So you don’t have to miss me too much…ah come on! Admit it. You’ll miss me… 

Okay. But what about if you are playing lotto tonight, and you win (and I lose), and you are also in the process of a divorce? What happens? What happens to your money? Well, I think it depends on where you are in the divorce process. If you win before you file the papers with the court (purchase an index number) , it’s easy. Your winnings are marital property and you have to share it with your spouse. Does that mean 50/50? Not necessarily. In New York, equitable distribution does not mean 50/50. Could the judge award you 50/50? Yes and more than likely the judge will.  In the case Ullah v Ullah 161 AD 2d 699, 555 NYS 2d 834 (2d Dept 1990)  “the court held that lottery winnings, including the right to future payments due after the commencement of the action, may be considered marital property, at least where the winnings are attributable to a wager of marital funds.”  Could the judge award you more than your spouse who actually purchased the ticket? Yes. It all depends on your circumstances of your divorce.

But let’s say you won after you have filed the summons and complaint and purchased your index number with the court. Is this marital property? That gets to be a tougher question. Usually anything that transpires after the filing of the summons and complaint or the summons with notice,  does not get counted in the marital funds. So that if you bought a house after you filed your divorce papers, the house is not marital but separate property, as a general rule. I would think the same is true for lotto winnings. If you won after you filed the papers the winning loot is separate property and your spouse, as a general rule, wouldn’t be entitled to any of it. Can circumstance alter this rule? Yes. Absolutely. What is an example of when you would lose your argument that the money should be all yours? Good question. I don’t know if I can think of it off the top of my head, necessarily… but read again what the Ullah case says. The way I read that, is that you may have already filed the complaint, but you have not served your spouse and you certainly may still be residing in the same residence as your spouse. That suggests, at least to me, that that ticket could technically have been bought with marital funds. I guess the question is, at what time does marital funds stop being marital funds? I don’t think the answer is as soon as you file the papers, necessarily. I think the answer depends. I think you could still be using marital funds after the papers in a divorce action have been filed, and so the winnings could conceivably be considered marital property and you would have to share the loot. Check out these lottery case too: Campbell v. Campbell, 213 AD 2d 1027, 624 NYS 2d 493 (4th Dept 1995) and Smith v. Smith 162 AD 2d 346, 557 NYS 2d 22 (1st Dept 1990)

What’s the takeaway? Well, I think this would be a trial issue. Big time. That is my hunch. But as I said before, why are you even fretting yourself? You are not going to win lotto tonight. Iam winning lotto tonight. So do yourself a favor and don’t waste your dollar. Want to hear my itinerary? Well, I would fly to Australia and from there…you know what? I won’t even get into it. I don’t want to make you jealous!!!

Okay. I’m done for tonight. I’ve got a bit of a headache, a really bad one that is threatening to throw me out of my chair. So, I’m going to take a break. Thank you for reading. And please visit again.  It was lovely to have you :)

Related posts on taxes and divorce: http://www.divorcesaloon.com/on-taxes-and-divorce-what-are-you-responsible-for

http://www.divorcesaloon.com/will-obamas-stimulus-package-aid-divorcing-couples

http://www.divorcesaloon.com/divorce-and-taxes-how-paying-child-support-and-alimony-can-reduce-your-tax-bill

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