Are Lottery Winnings Considered Community Property In Texas?

Property Division Attorney

It is always understandable to be concerned about how marital property will be divided in a divorce. Property division in a Texas divorce is subject to certain laws, and several factors can go into how the community marital estate is divided. These include the spouses’ ages, each partner’s earning capacity, the tax effect of a property division, and any fault for why the divorce happened.

This post describes essential community property aspects in Texas divorces, notably whether lottery winnings are community property. If you have property division questions in your divorce, call our Dallas property division attorneys at Orsinger, Nelson, Downing, & Anderson. We are ready to lend our expertise to your case. Our experienced, Board-Certified Texas attorneys offer the region’s top-rated family law services for you, your finances, and your family.

You Won The Lottery. Do You Need To Share It With Your Spouse?

It depends. Texas is a community property state, so, all property, including assets and debts, are considered to be either separate or community property (and sometimes a mixture). Community property is often called “marital property” and it presumptively includes all property obtained or acquired during the marriage. Community property is what a Court divides between the spouses during a divorce. There are certain exceptions; for instance, if you receive a gift or inheritance, this would not be considered community property.

However, winning the lottery during the marriage would often be considered community property during the divorce. That said, every property division case is different, and whether the lottery winnings will be considered community property depends on the exact circumstances. A Texas family law judge is authorized to decide what is just and right in the division of marital assets. Things that the judge may review regarding how to allocate lottery winnings are:

  • Were the spouses separated when they won the lottery?
  • How long were the spouses separated at the time of the lottery win?
  • How did the couple acquire the lottery tickets? Were community funds used? Was the ticket bought through an office pool?
  • Was there a temporary order in place before the lottery win?
  • What are the tax consequences of the lottery win on the parties’ respective incomes?

Depending on the answers to these and other questions, a divorce attorney could successfully argue that one party should receive more or less of the lottery winnings. The more the lottery funds are disconnected from the marriage, the more likely the judge could award more money to one party, in the interest of a “just and right division” of the community estate.

For example, if the couple was separated for six months and the spouses had been paying their own bills in separate accounts, the lottery winner might receive the lion’s share of the windfall. If you just receive a sizeable lottery win, describe your scenario to your property division attorney, who can then offer their learned opinion on whether the money might be considered separate or marital property.

Speak To Our Dallas Property Division Attorneys Today

At Orsinger, Nelson, Downing, & Anderson, our clients know that our Dallas property division attorneys are on their side. If you have property division questions about your divorce, please contact our Dallas law office today at (214) 273-2400 for a confidential legal consultation. Our attorneys’ depth and breadth of experience in complicated property disputes and asset division ensure we can best protect your financial and legal interests in any circumstances.