You’ve hit the jackpot — literally — and are ready to cash in your lottery winnings. Celebration bells begin ringing in your head and you start thinking of what you will do with all your winnings — that is, until you remember you have an ex-spouse who may or may not be as jubilant as you are with your new victory.
Elation diminishes, celebration bells are replaced by alarm bells, and you start wondering if you should have even bought the ticket in the first place.
Lottery Winnings & Divorce: What Happens?
Well, it’s not as complicated as you may think it is. The answer to this life-changing question all depends on when you purchased the ticket.
It’s All About the Timing
You might be relieved to find out that your child custody agreement will have no bearing on whether or not you must split your lottery winnings with your ex. Whether your ex-spouse has full custody of your child or not, you will not be obligated to share any part of your winnings — under two conditions:
- The ticket was not purchased while you were married
- You are not in arrears with child support payments
If you live in a community property state and purchased a winning lottery ticket while still married, you are legally obligated to split half of the earnings with your wife, although there is a loophole to this: if the winning lottery ticket was purchased with money that was either inherited or gifted, you are not obligated to split the winnings. In the event that you purchased the lottery ticket after legally separating, it is unlikely that an ex would receive any share of your earnings as it would be difficult to prove that he or she is entitled to the money.
What is Community Property?
Community property is property that is jointly owned by married spouses. Currently, nine states in the U.S. are considered community property states. The laws in these states say that everything a married couple acquires during a marriage is shared jointly between the two. This includes anything ranging from properties to debts, and — yes, lottery winnings.
There are a few things, though, that community property doesn’t include, such as any type of gift and/or inheritance which was given to you as well as anything that was owned prior to the marriage.
What If I Don’t Live in a Community Property State?
In states that do not observe community property, the state’s laws will determine whether you are legally obligated to give your spouse any of your lottery winnings if you purchased the ticket while you were still married. If the ticket was purchased with shared money while you were married, some judges may rule on a division of funds that they deem is fair and equitable — depending on individual circumstances. A judge would take the following things into consideration when determining the division of funds:
- Both spouse’s income
- Who has primary custody
- How many years the couple were married
- Ex’s spouse’s future earning capacity
Whether or not you purchased the ticket using your own funds may not be taken into consideration depending on other assets involved in the case as well as the judge in your state.
What If I Am Behind on Child Support Payments?
If you are in arrears on your child support payments, whether or not you purchased the ticket before or after you and your spouse separated or divorced has no bearing on what is owed. The spouse who has custody of your child can issue a court order requesting the amount that is owed to him or her be paid to you from your winnings. Some states deduct whatever is owed for child support from winnings. Once the child support deductions are made and you are no longer in arrears, you are entitled to the rest of your winnings.