LUCKY LOTTERY: Did you really win big?
With thousands of Connecticut residents winning the lottery each year, whether lottery winnings can be divided during a divorce proceeding can be an important aspect of a divorce. Any property that a person acquires either prior to or during a marriage is subject to equitable distribution. Under the Connecticut General Statute § 46b-81, the Court may assign to either the husband or wife all or any part of the estate of the other during equitable distribution. This statute gives the Court broad discretion in distributing property when marriages dissolve. The factors that the Court considers are “the length of the marriage, the causes for dissolution or the breakdown, the age, health, station, occupation, and amount and sources of income, earning capacity, vocational skills, education, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in the value of their respective estates.” C.G.S.A § 46B-81(c).
In Dombrowski v. Noyes-Dombrowski, the Connecticut Supreme Court ruled that lottery winnings can be treated as marital property for equitable distribution and can also be treated as income to determine alimony. The Court concluded that the parties treated their marriage as an economic partnership and therefore divided the assets on a 50/50 basis.
The Court in Williams v. Williams ruled that the Lottery winnings were to be treated as an income stream for alimony and the winnings were not to be viewed as marital property to be divided equally at dissolution. The Court declined to treat the Lottery winnings as marital assets to be divided equitably because of the uncertainty of terms of the partial assignment of the winnings to the third party, the questionability of the whether the court can order an effective assignment of future payments, and the tax consequence of assigning the future payments.
C.G.S.A 46b-81(c) gives the Court broad discretion in dividing the marital estate. The purpose of both periodic and lump sum alimony is to provide continuing support. The purpose of a property division under a dissolution proceeding is to unscramble existing marital property to give each spouse his or her equitable share during dissolution. Lottery winnings may be an asset or a stream of income, and never both. Good luck and you got to play to win!