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With the growing popularity of Powerball and state lotteries, along with the growing number of casinos and prize money games, courts are being forced to deal with prize money in dividing property during marital dissolution proceedings.
The law is well settled that a lottery prize won during a marriage is generally considered property acquired during the marriage subject to equitable distribution. However, community property and marital property states differ in the theories adopted, and even some marital property states differ in considering whether "equitable" means an equal distribution in dividing lottery winnings during a divorce.
Courts that have already dealt with this issue have focused on a number of factors in determining how to divide the property.
States
property schemes generally fall into one of two categories, common law or
community property. Common law states differentiate their property scheme from
community property states by the way property is titled during the marriage.
Generally,
in common law states, title controls ownership of the property during the
marriage. At divorce, common law states presume property is “marital” property,
unless it falls under one of the exceptions that generally relate to the source
of acquisition, such as a gift, bequest or inheritance or the timing of
acquisition as before the marriage.
Common
law property states divide property based on an equitable, but not always equal
distribution.
In
equitable distribution states, “marital property” resembles community property.
An
equitable division is the division of marital property by a court in a divorce
proceeding under statutory guidelines that provide for a fair, but not
necessarily equal, allocation of the property between the spouses.
Depending
on the relevant state statutes, courts can take into account a variety of
factors in determining a fair and just division of property in a divorce action
including the disparity of earning power of the parties, their business
opportunities, capacities and abilities, the physical condition of the parties
and probable future need for support and educational background, the fault in
breaking up the marriage, and the benefits the innocent spouse would have
received from continuation of the marriage.
Equitable
distribution is applied in nearly all the states that do not have a community
property system. Community property
states view married couples as each having a one-half divided interest in property
accumulated during the marriage, regardless of title.
Upon
divorce, courts in these states divide property that has accumulated during the
marriage, but also exclude property acquired through individual gift or
inheritance.
Like
the equitable distribution theory adopted by common law states, six of the nine
community property states also use the equitable division rule. The states
having community property are Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin.
MARYLAND
versus ARIZONA
In an Arizona
divorce case, Lynch v. Lynch, the wife sought a share of
lottery proceeds from a lottery ticket purchased by her husband. The husband and
wife had filed for a divorce and attended a hearing where the wife testified
the marriage was irretrievably broken. The parties had not obtained a legal
separation and the divorce decree had not yet been entered.
As a
result the Arizona
court viewed the ticket as community property and thus the wife received a
portion of the prize. In Arizona,
the marriage is not considered ceased until a final dissolution is entered by
the court. Couples in Arizona,
like the Rossis, who wish to end accumulation of community property, have the
option to file for a legal separation. Denise Rossi had the option of obtaining
a legal separation when she no longer acted or intended to be married to her
husband. The existence of that right combined with her failure to exercise it,
further persuaded the court to find in her husband’s favor and award him the
prize money.
Other
jurisdictions use the date of separation as the date of cessation for
accumulation of marital property. Therefore, lottery winnings from a ticket
purchased during separation become the separate property of the spouse who
purchased the ticket. Courts are not in agreement with this theory in cases
where the property would normally be considered marital since the parties were
still in a valid marriage.
Compare
the facts in Lynch with Alston v. Alston, where the husband
appealed from a judgment awarding the wife one half of his lottery winnings
when the couple had been separated for 1 1/2 years and the wife withdrew an
initial divorce petition after learning of her husband’s stroke of luck.
Neither husband nor wife had taken action toward dissolution proceedings prior
to winning the Powerball. The wife urged the court to consider the parties’
continuous relationship after the separation and the significant efforts of the
wife in the household responsibilities. The husband argued that the wife had
not made any significant contributions
to the family and that the wife had abandoned the marriage, both factors
considered under Maryland
law. The husband further argued that one of the statutory factors, which allows
the court to consider how and when the property was acquired, should prevent a
monetary award. Finally, the husband pointed to the “catch-all” factor, under
which the judge may consider other necessary or appropriate elements. He argued
that the situation before the court was unique, in that the asset was not
acquired through the parties’ joint efforts to provide for their future
together.”
The
Court of Appeals ultimately sided with the husband and reversed the decision stating
that property acquired after separation should be taken out of the marital
property pool, noting that the timing of acquisition must be considered.
The
ultimate decision of whether to grant a monetary award and the amount of such
an award are matters entrusted to the sound discretion of the trial court. Maryland distinguishes
between an equitable division of property and an equal division of property.
The
Maryland Legislature specifically rejected the notion that marital property should
presumptively be divided equally.
535,
Journal of the American
Academy of Matrimonial
Lawyers, Vol 18, (2003);
In
re Marriage of Rossi, 90 Cal.App.4th 34 (Cal.
App. 2nd Dist. 2001).
Campbell v. Campbell, 213 A.D.2d 1027
(N.Y. App. Div. 1995); Ullah
v.
Ullah, 181 A.D.2d 699, 581 N.Y.S.2d 217 leave denied 76 N.Y.2d 704 (N.Y App.
Div. 2002); Black’s Law Dictionary 97th Ed., 1999); Cooper v.
Cooper, 513 S.W. 2d229 (1974)]
See,
e.g., Alston v. Alston, 629 A.2d 70 (Md. 1993); Giedingham v. Giedingham,
712 S.W.2d 711 (Mo. Ct. App. 1986); Lynch v. Lynch, 791 P.2d 653(Ariz.
Ct. App. 1990).
791 P.2d 653 (Ariz. Ct. App. 1990).
Id.
Flowers v. Flowers, 578 P.2d 1006, 1009 (Ariz. Ct. App.1978).
Ariz.
Rev. Stat. § 25-313(B) (2000).
Lynch v. Lynch, 791 P.2d 653 (Ariz. Ct. App. 1990).
629 A.2d 70 (Md.
1993).Md.
Code §8-205(b) (1994).
Id.
Md.
Code §8-205(b) (1994).
Alston v. Alston 629 A.2d 70 (Md. 1993).
Id.
Lemley v. Lemley, 649 A.2d 1119 (Md. App. 1994).
Alston v. Alston 629 A.2d 70 (Md. 1993).
Id.
In re Marriage of Rossi, 90 Cal.App.4th 34 (Cal. App. 2nd Dist. 2001).
THE SECRET SCIENCE OF WINNING LOTTERIES, SWEEPSTAKES AND CONTESTS: Laws, Strategies, Formulas and Statistics [Paperback]
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Book Description
Publication Date: July 26, 2012
There is a science of winning lotteries, sweepstakes and contests! When it comes to lotteries, sweepstakes and contests, there are ways to improve your odds or probability of winning. They are discussed in this book, with a lot of detail and some humor. Blind reliance on luck or chance is not necessary to win lotteries, sweepstakes and contests. The "4Ps" of persistence, preparation, poise and a positive mental attitude are necessary to win on a consistent or regular basis. Therefore, just about anyone is capable of winning. Charles Jerome Ware is a noted author and attorney, microeconomist, lotterician, sweepstaker and contester. He is a principal in the national law firm of Charles Jerome Ware, Attorneys and Counselors. Dr. Ware is a highly successful and life-long sweepstaker and contester. He is also a successful lotterician who, for several years, has investigated, monitored and researched lotteries throughout the United States and several foreign countries. Dr. Ware is the recipient of numerous awards for his accomplishments in law and other areas. He lives in Columbia, Maryland.
http://amzn.com/1432793888
www.CharlesJeromeWare.com ("We fight. You win.")
Attorney Charles Jerome Ware is renowned and consistently ranked among the best attorneys and legal counsellors in the United States. [GQ Magazine, The Washington Post, The Baltimore Sun, The Columbia Flier, USA TODAY, The Howard County Sun, The Anniston Star, The New York Times, CNN, MSNBC, CBS, ABC, NBC, FOX-TV NEWS, WHUR, WHUT, MPT, BBC, The Wall Street Journal, ABA Journal, et al.]
Among attorney and author Charles Jerome Ware's best-selling books are:
(1)
The Secret Science of Winning Lotteries, Sweepstakes and Contests;
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(2)
Understanding the Law: A Primer;
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(3)
The Immigration Paradox: 15 Tips for Winning Immigration Cases;
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Legal Consumer Tips and Secrets: Avoiding Debtors' Prison in the United States; and
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(5)
Quince (15) Consejos Para Ganar Casos Del Inmigracion.
http://amzn.com/1462068952
www.CharlesJeromeWare.com ("We fight. You win.")
Attorney Charles Jerome Ware is renowned and consistently ranked among the best attorneys and legal counsellors in the United States.
[GQ Magazine, The Washington Post, The Baltimore Sun, The Columbia Flier, USA TODAY, The Howard County Sun, The Anniston Star, The New York Times, CNN, MSNBC, CBS, ABC, NBC, FOX-TV NEWS, WHUR, WHUT, MPT, BBC, The Wall Street Journal, ABA Journal, et al.]