Prize Money/Lottery


#1

Lottery winnings and prize money are martial property. If the prize is won before separation it will be split, no matter what the payment plan is. If payments are to occur in the future the money would be treated as an account receivable and would still be split, with each accounting for half of the taxes.
I am not sure what your colleagues are referring to as separate money, unless something is inherited, or owned prior to the marriage kept segregated during the marriage, its marital. Cash in a person


#2

This came up at work today and I am curious.

Let’s say I am married and I won a 2 million dollar lottery (wouldn’t THAT be nice? [:D]). I buy the ticket with my money. I take the funds in a lump sum. 3 months down the line, my husband leaves me and wants a divorce. Would he be eligible for 50% of the lottery funds?

I say yes…that’s it’s a ‘gift of the marriage’ or a ‘marital asset’. Others say no…it’s separate property because it was bought with separate money.

IF THEY DO get 1/2…then would they be liable for 1/2 of the taxes owed on the winnings?