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Lucky lottery winner's luck runs out during divorce

One of the most complex parts of divorce is property division. While a handful of states are considered "community property" states (where most assets are presumed to be owned by both spouses), Colorado is among the majority of states using the "equitable distribution" model. Assets earned during the marriage presumably belong to the spouse who earned them. And during a divorce, assets are to be split equitably (but this doesn't necessarily mean a 50-50 split).

Unfortunately, neither of these two property division models is perfect or completely consistent. Certain assets can be hard to classify as either marital or separate, including assets gained during the divorce itself. A recent case from another equitable distribution state is a good example.

In October 2011, a Connecticut man filed for divorce after an 18-year marriage. Less than two months later, the man was told that he had won $1 million in the lottery. Rather than informing his soon-to-be ex-wife about the prize money, he instead told the lottery commission that he planned to split the money with his son from a previous marriage and his sister. After taxes, each one-third share was worth just under $228,000.

The man's wife was not told about the winnings until after the shares had been distributed. She was none too happy about how the money had been split, and she alleged that he was trying to conceal marital assets. The court agreed with her and ordered the man to give her nearly his entire share of the prize money. Since then, the man has been trying desperately to legally halt the transfer of money. Last month, however, an appellate court ruled that the money can and will be transferred from the man's bank account into his ex-wife's possession.

Situations like this are often complicated. On one hand, lottery winnings are a major windfall that the non-winning spouse will naturally want to share. On the other hand, the timing of the winnings (after divorce papers have been filed) can make it difficult to know whether the assets should be considered separate or marital. Complicating matters further is the allegation that the man was hiding assets, which courts very much frown upon.

No matter what property division problems you may be facing, please seek the help of an experienced family law attorney.

Source: Courthouse News Service, "Court Defeat for CT Man Who Hid Lotto From Ex," Jeff D. Gorman, May 19, 2015

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