“Do you have to share lottery winnings with your spouse”? This question will most definitely cross the minds of many who happen to be married. Winning the lottery can be a dream in the best of situations for many of us. The economic flexibility that lottery winnings provide can give us options.
With choices, we can make good decisions for ourselves and our families. While winning the lottery during a divorce case isn’t exactly the best time to do so.
With that said, you must be careful, be honest with your spouse about the winnings, and disclose information to your attorney regarding the nature of the winnings.
Do you have to share lottery winnings with your spouse
You and your spouse can work out how to divide the money among yourselves. The more acquisitions and possessions you have in your divorce, the more inventive you’ll be about how you divide the money — if at all.
There are many ways to negotiate a path to divorce.
Being honest about your lottery winnings and providing information to your spouse about the nature of that win can enable a good conversation about the remaining assets. This article will guide you on how to deal with lottery winnings.
Texas is a community property state. This means that the possessions you owned at the time of death or divorce are considered part of the community property owned by you and your spouse.
It doesn’t matter whose income was used to pay for or obtain property. It does not matter whose name appears on the address or receipt of the document.
The assumption means that you or your spouse will need to prove with evidence that the possessions should be part of one of your individual belongings if you do not believe the property should be subject to division in the event of your divorce.
The two outstanding examples of when possessions obtained during your marriage may not be deemed joint property are reference property acquired by gift and inheritance.
If someone granted you some money but somehow made it intended for you to be the only intended recipient, this would be considered separate property belonging to you.
The second example is if someone dies and leaves you some money or belongings in your will. This will also count as a separate property under Texas community property laws.
Otherwise, the spouses share the possessions obtained in Texas. It doesn’t matter if your spouse earns more than you or if the spouse’s name is on the title deed.
All that matters is the money used to pay for the item and the date of purchase. If your spouse uses their income from their job, the property will likely be community property subject to apportionment in the event of a divorce.
Whether you and your spouse can divide that property yourself by negotiation or if a judge will ultimately need to decide on the matter is entirely different.
A lottery ticket purchased with community income will be joint property. The winnings will be community property.
What Steps Should You Take After Winning The Lottery?
Once you think you have the winning numbers, combination, or whatever is required in a particular game to win the big prize, you should log into the lottery website to ensure you have a winning ticket.
You should sign the back of the ticket and write your name below your signature, almost as if you were signing the back of a check or something similar.
Photocopy the ticket and then keep the original key in a safe place. It may be wise for you to hire an attorney who works in estate planning, such as one from The Law Firm of Brian Fagan, to help you plan how you will handle that money in the event of the end of life.
In the meantime, if you have debts, bills, or other places to spend that money, you can work with your spouse on determining how to use it.
If you win the lottery while your divorce is in process, work with your divorce attorney to find out how to keep your money safe.
If you haven’t done so yet, you will need to share with your spouse and their attorney that you won the lottery so that money can be considered community when it is divided between you.
What If You Are Separated From Your Spouse And Win The Lottery?
This is, at first glance, a bit of a grey area. Let’s say you and your spouse separate on October 15th. This means that you are no longer living together and plan to get a divorce sometime soon.
However, before filing those divorce papers, you buy a lottery ticket. When you get home from work, you turn on the news and know that the numbers you selected were the winning combination.
After making sure that you have the winning combination in your hand, the next clue is what to do with the money, whether to share it with your spouse.
After all, you no longer live together and are about to file for divorce. It seems fair that the money would not need to be divided.
Still, you’re married; that is until the judge declares your marriage to be over, you are still married.
This means you are still married before the divorce lawsuit is filed, during the divorce, and until the judge signs the final divorce decree.
A lottery ticket purchased during your marriage is considered joint property.
What If I’m Already Divorced Before Winning The Lottery
On the other hand, if you win the lottery after being granted a divorce, this will be your separate property and will not be part of the divorce.
One thing you need to remember is that as your income or assets increase due to lottery winnings or even a pay raise from your day job can lead to increased child support responsibilities.
Your ex may learn about your earnings and argue that your resources have increased to the point that this is equivalent to receiving a raise.
Hiding Your Lottery Winnings From Your Spouse – How Dangerous Is That?
Winning the lottery is a dream of many of us. Lottery winnings would be a ticket out of whatever situation we found ourselves in at that moment in time.
Even if our lives weren’t so bad, it would always be nice to have the option to tell our employer that we won’t come to work the next day.
Paying off your debt, setting aside some money for your kids, and taking a big trip might be what you have in mind when you think about lottery winnings and what you would do if you were lucky enough to hit the jackpot.
However, what if you are in a situation where you finally win the lottery but are going through a divorce?
Do you try to hide those earnings from your spouse until the divorce is over?
Don’t try to spend more on luxury items like clothes or a new car. Just put your winnings down, put your winnings in a new bank account you just opened, and hope your spouse never finds out about the winnings.
This plan carries some risks, but those risks may be worth the reward if you can successfully hide the money and don’t have to divide it up during the division of community property for your case. Or, at least, that’s the plan you had in mind.
One of the reasons you may want to hide money from your spouse is that they are terrible with money.
She may be a compulsive shopper who cannot stay away from stores or any online retail outlet.
Or your husband may be a gambler who spends every penny he earns (and then some) on sports betting.
The reason why you should hide money is done in their best interest. Whether you claim the money in your name or do so anonymously, hiding money from your spouse isn’t necessarily against the law but can land you in hot water in a divorce.
The family court judge will oversee the entire process even if you do not enter the courtroom until the case is over and concluded.
Consequences Of Hiding Winnings From Your Spouse During A Divorce
If you decide to hide assets from your spouse and it is discovered that you have done so, there will be consequences to consider.
There is a part of your divorce that will be known as Discovery. During Discovery, you and your spouse can send questions and requests for information to the other person.
All this is done through the court. If you knowingly lied to your spouse, withheld information, or weren’t close about your lottery winnings and that information was somehow discovered, your spouse may be able to claim attorney’s fees and other penalties from the judge for violating the terms of the discovery request.
The punishment can be very severe depending on the nature of your actions and the size of your lottery winnings.
Have you ever tried to do a credit check on yourself? It’s a wise thing to do even if you haven’t been through a divorce.
The process will allow you to see what kind of debt you have in your name, your payment history on the debt, and the actual values of the debt across different regions.
It’s a good idea to request a copy of your credit report and divorce history to determine if your spouse has opened any debt accounts in your name.
You may want to ask for a copy of your spouse’s credit history or account to see if any money is being hidden or if any significant amounts of debt have been taken out or paid off because of lottery winnings.
Looking at your bank account to determine if you believe any funds have been transferred or cleared is even simpler. For example, what if your spouse opened a new bank account but needed a little money?
Not to cause any suspicion, your husband may have opened an account with $15.00 drawn from your checking account.
While this amount of money may not be particularly noteworthy, you can look for small clues to determine if something much more significant is happening.
While the odds of winning the lottery jackpot are slim and may seem like a pipe dream rather than reality.
There is always the possibility that a dream could come true, so if that happens, there are steps that can be taken to protect the funds:
An unmarried person can protect his earnings by keeping him wholly separate and away from the rest of the family’s money.
This intent to win adjudication can even be documented in a cohabitation agreement, so there is clear evidence.
In the case of those who are married or married to a civil partner, keeping the earnings separate does not automatically provide protection, and the best way to achieve this is likely a marriage agreement.
The terms of such a document must be specific to the particular circumstances of the family requesting it.