Maybe you have been playing your lucky numbers in the lottery for a decade. Perhaps you bought a scratch-off on a whim. No matter how you win the big bucks, when you win, it determines whether you will need to share the jackpot in a divorce.
Lottery proceeds are an asset, no different than a car, house, income, or retirement funds. All assets acquired during the marriage are typically subject to New York’s equitable distribution rules. Property received or earned before or after the marriage is usually considered separate property that remains with the original owner.
We’ll look at different scenarios and how a judge would potentially treat lottery winnings.
You Won the Lottery Before the Marriage
A lottery win before the marriage occurs stays the property of the winner. Like other assets, however, lottery winnings can be transmuted from separate to marital property.
Let’s say you use some of the lottery money to buy a rental property after you marry as an investment. Your spouse oversees the property’s upkeep and handles renter communications. Even though bought with separate money, that property could now be considered marital property to which they have an equitable right.
Property purchased with pre-wedding lottery winnings will become marital property if the purchase is for the enjoyment and use of both spouses. This property will also be considered when dividing assets in a divorce.
You Won the Lottery During the Marriage
This scenario is typically the most straightforward. A lottery jackpot during a marriage is the property of both spouses. The big payday is subject to equitable distribution upon divorce.
A note of warning: Do not hide your lottery win. If your scheme is discovered (and attorneys are paid to uncover this transgression), you could lose all the money you attempted to withhold and a bigger share in other assets. Judges have no compassion in these cases. Buying a winning ticket during the marriage but not collecting on it until after the divorce is filed can also land you in trouble. The court can re-open the divorce and divide it appropriately.
You Won the Lottery After Divorce Was Filed
The date your divorce is officially filed in New York is when newly acquired assets become separate property. The winnings are separate property if you win the lottery after the divorce is filed but before it is finalized.
While the unexpected windfall is separate property, the winnings can still impact the divorce terms. The payout can be considered income and factored into child custody and spousal support.
The additional income can also impact how marital assets are divided. Because the goal is equity, a judge may award your spouse a more significant share of the marital property so that you are not significantly more financially advantaged.
You Won the Lottery After the Divorce
If the lottery is won after the divorce is finalized, the money belongs only to the person who won it. Post-divorce lottery winnings can still impact your divorce case. A payor spouse might pay more, and the spousal support amount could be increased. A payee spouse could have their support reduced or eliminated. Child support payments could also increase or decrease.
Understand Your Spousal Rights in Equitable Distribution
Whether you have a big lottery payout, inherited money from a relative, or are generally concerned about property division, hiring a skilled divorce attorney is the best action. Our team at the Law Office of Dennis R. Vetrano, Jr., LLC, is experienced, talented, and fiercely dedicated to our client’s best interests.
Schedule a consultation to learn more about our strategic and pragmatic approach to New York Divorce. Email us online or call (845) 605-4330.