Are lottery winnings marital property?

Today’s scenario: A man who is legally separated from his wife wins the lottery. Does he have to share the winnings with his wife? The marital property law of your state holds the answer.

I’ve done the calculation and your chances of winning the lottery are identical whether you play or not.” — Fran Lebowitz

If you buy a ticket on Friday, you have a better chance of dying by Monday than winning the lottery.” –Anonymous

Do ya feel lucky, punk? Well do ya?” — Clint Eastwood in Dirty Harry.

All life is 6 to 5 against.” – Damon Runyon.

Jackpot or “Share”Pot?

Rich Zelasko of Detroit, Michigan, had been separated from his wife, Mary Beth Zelasko, for two years when he bought a ticket in the Mega Millions Lottery in 2013.

He won more than $30 million. Does he have to share it with his ex-wife? The divorce was final in 2018.

The Michigan appeals court says marriage isn’t over until it’s over. So Mary Beth Zelasko gets $15 million of the jackpot awarded by an arbitrator.

The husband’s attorney argued, “Rich was lucky, but it was his luck, not Mary’s, that produced the lottery proceeds.” But the arbitrator ruled that the ticket was marital property and the court upheld that decision.

A Different Result in California

Denise Rossi won $1.3 million in the California Lottery.  She field for divorce 11 days later.  However, she did not disclose her winnings.  When it was discovered, the judge gave the entire amount to the husband.

Virginia Marital Property Law

In Virginia, marital property is determined at the date of separation. So Rich would not have had to share his winnings if he lived in Virginia.

Maryland and DC Marital Property Law

In Maryland and DC, marital property is determined on the date of trial and it includes property acquired during the marriage.  Under marital property law there, the judge can still adjust the division of property through a marital award after considering various factors set forth in the statutes.

That’s just what happened when Mr. Alton bought a DC lotto ticket and won over a million dollars while separated but not divorced.  The trial court gave the wife half, but the Maryland Court of Appeals reversed, saying:

Mr. Alston, using his own funds, purchased the ticket and won the Lotto. This event was not dependent in any way on the parties’ joint efforts or shared life, past or present. At the time, the marriage was, for all practical purposes, over.

Alston v. Alston, 331 Md. 496 (1993)

Alimony and Child Support

Lottery winnings are also considered to be income in all three jurisdictions and that can affect alimony and child support.

Life insurance to protect the alimony payment in a divorce

Recently I wrote regarding using life insurance to assure payment of child support.  Another scenario is life insurance to protect the alimony payment in a divorce – the spouse being the beneficiary of the policy.

This is a straight forward consideration flowing from payer/insured spouse to payee/beneficiary spouse.  The insured wants less coverage and less premium, the payee/beneficiary spouse wants more coverage.

Alimony Payer Benefit

Premiums on a policy of life insurance on the alimony payer benefit the alimony payee.  Payments to a third party on behalf of or for the benefit of a spouse or former spouse can qualify as alimony.  Paying insurance premiums can qualify if the payer spouse is not obligated to pay under the insurance contract – because in that situation he or she is not simply paying his or her own expense.

Generally, the owner of the policy is the person who is obligated to pay the premiums.  So in order for premiums on the life of the insured/alimony payer’s life paid by the insured/alimony payer to be deductible as alimony, the alimony payee must be the owner of the life insurance policy.

The parties’ Agreement should require the insured/alimony payer to pay the premiums on the payee’s behalf and the parties’ Agreement should state that such payments are alimony.

Survivor Annuity

Another situation where life insurance can be appropriate is to replace a survivor annuity if it is unavailable or available only on undesirable terms.  A traditional defined benefit pension pays a lifetime annuity to the retiree.

Federal law generally requires married persons to elect what is known as a joint and survivor annuity payment option, unless the employee’s spouse agrees otherwise in writing. In divorce, the parties can agree to a joint and survivor annuity or the court can order it.  Under this option, if the non-employee spouse survives the employee spouse, the pension payer continues the annuity payments at a reduced rate to the non-employee spouse for his or her life.

The initial payment (during the joint lives) under a single life annuity payment option is higher than the initial payment under the joint and survivor annuity option. Depending on the amount of that payment reduction, it may make financial sense to elect the single life annuity and buy life insurance on the employee’s life to protect the income stream for the non-employee in the event that he or she is the survivor.

The advice of an experienced life insurance professional can be very useful in doing this analysis. For further information see:

Medicaid is a means tested program.  If your countable assets or your income exceed the allowable maximums you do not qualify and Medicaid will not pay your long-term care costs until you do.  Once you need long-term care, in the Washington area you will be spending $8,000 – $12, 000 per month on nursing home care and somewhat less for care in assisted living or at home, depending on the level of care and the hours of coverage.  If you are going to end up qualifying for Medicaid, it makes sense to qualify as soon as possible.  This general discussion applies to Maryland, Virginia and the District of Columbia but there are differences, some very significant, in Medicaid law and practice in the three local jurisdictions. 

If your countable assets exceed the individual resource allowance of $2,500 in Maryland, $2,000 in Virginia and $4,000 in D. C., in order to qualify for Medicaid you would have to decrease your countable assets.  Complicating the process is Medicaid’s penalty for uncompensated transfers.  If you simply give assets away you cannot receive Medicaid benefits until after a penalty period.

One possible choice for the “over-resourced” Medicaid applicant is to convert countable assets into noncountable assets.

In most circumstances and within equity limits, your home is not a countable asset.  So if you have a mortgage loan, pay it down or off.  If your home needs improvements, have those improvements done. 

Irrevocable burial contracts, designated burial savings within limits, and a burial plot, and analogous cremation arrangements, are exempt resources.  Some kind of final expenses are inevitable so these are generally good uses of excess countable resources.

At least one vehicle is exempt in all three jurisdictions whether or not the applicant drives it so long as it is available to meet the applicant’s transportation needs.

There are other various other exempt assets.

Another choice in some cases is to purchase a Medicaid compliant annuity, turning your countable asset into an income stream.  This can be a viable planning strategy but it depends on, among other things, your income before the annuity purchase – lower is better, and  whether some or all of the funds are in an IRA – lower is better.

Gifts, outright or to a trust, or loans to trusted family members can also be beneficial, even when they cause Medicaid to impose a penalty period. The timing of the gift or loan, the use of the funds and the timing of your Medicaid application are all crucial to obtaining the maximum benefit of this strategy.

For married applicants, Medicaid looks at the combined assets of both spouses even if only one is applying.  The non-applicant spouse is allowed to keep up to $123,600 of otherwise countable assets, the community spouse resource allowance (CSRA).  Transfers between spouses are not penalized.

Every case is unique and Medicaid planning requires knowledge, careful analysis and good judgment.  If you or a loved one need or will soon need nursing home level care, call us.  We can help.


Medicaid is the primary government program that pays for long-term care of the elderly or disabled. It is a federal-state partnership. Federal law sets out the broad parameters of the program and the states administer it within their borders.

Medicaid is a means tested program. If your countable assets or your income exceed the allowable maximums you do not qualify and Medicaid will not pay your long-term care costs until you do. One way to financially qualify is sell all your assets and use the proceeds to pay your nursing home bill every month until you are out of money and then apply for Medicaid – because now you are eligible. You still have to pay all of your income to the nursing home each month, but Medicaid will pay whatever you are short. You get to keep a personal needs allowance of as little as $40 each month ($40 in Virginia, $70 in DC and $77 in Maryland).

Medicaid planning for a single person is the process of lawfully arranging your affairs to improve on that result so that you can qualify for Medicaid as soon as possible while still having access to funds to pay for the ”extras” Medicaid won’t pay for, and potentially leaving something for your heirs.

Medicaid planning for a married person is lawfully arranging your affairs to qualify for Medicaid as soon as possible and maximize the legal and financial protection for the “community spouse”.

If you or a loved one need or will soon need nursing home level care, call us. We can help.

Your estate planning should include a plan for long-term care.Most Americans do not know the facts surrounding their potential need for long-term care.  This was confirmed recently in a telephone survey of 1,735 Americans over the age of 40, funded by the SCAN Foundation and conducted by the Associated Press (AP) – NORC Center for Public Affairs Research.

Most People Need a Plan for Long-Term Care

According to the Genworth Cost of Care Survey of 2015, 70% of Americans over the age of 65 will eventually need long-term care.  By the year 2040, 22% of the population will be over the age of 65.  This survey showed most people over 40 don’t believe they will ever need long-term care.

Coordinated Care Best Approach

The survey defined person-centered care as “an approach to health care and supportive services that allows individuals to take control of their own care by specifying preferences and outlining goals that will improve their quality of life.” This approach points to the consideration of coordinated care.

Coordinated care involves communication among various medical providers to reduce overlap, misdiagnosis or other medical oversights.  Because many people don’t have a plan, they miss out on the benefits provided by this approach. The survey shows a lack of appreciation for the improved quality of life it can provide.

Cost of Long-Term Care

The study showed most people don’t understand the coverage for long-term care provided by Medicare, Medicaid and private health insurance.  Medicare does not pay for ongoing long-term care, although it will pay for intermittent stays at nursing facilities.  Yet, 34% surveyed thought Medicare would pay for long-term care.

Medicare doesn’t typically pay for care in the home.  However, 36% of those surveyed thought it would.

Most health insurance plans will not cover long-term services like a nursing home or ongoing care provided at home.  Yet, 18% of Americans age 40 and older believe that their insurance will cover the costs of nursing home care.  25% believe their plan will pay for care at home.

Medicaid is the largest payer of long-term care services. Medicaid is a federally and state funded needs-based benefit that covers various types of long-term care depending on the state’s regulations.  In 2013, Medicaid paid for 51% of the national long-term care bill.  However, 51% of Americans age 40 and older reported that they don’t expect to rely on Medicaid to help pay for their ongoing living assistance expenses as they age.

The actual costs for long-term care are staggering.  The Genworth Survey found that for 2013 the average bill for a nursing home was about $80,300 per year and home health care cost about $44,616.

Planning for Long-Term Care

The survey showed that two-thirds of Americans over the age of forty (40) have no plan for long-term care.  It seems likely that many Americans are reluctant to face the possible loss of independence related to aging and therefore don’t plan for this possibility.

While nearly 65% of people surveyed had planned or talked to loved ones about their funeral arrangements, only 42% had planned or discussed long term care. Just 33% had saved money for long-term care.  It seems that  how we want to be memorialized is easier to think about than how we may end up dependent on others.

Don’t Ignore the Need to Plan for Long-Term Care

Although not a popular topic among Americans over 40, a plan for long-term care is important.  If you, a loved one or a client needs help figuring out the options, please think of us.  We can help and we are always happy to hear from you.


We are providing this information as a public service.  We practice elder and disability law, but counseling and representing veterans in connection with VA benefits is a specialized field and we do not offer these services.  Don’t stop, read on …

This is the benefit that changes:

Vets and their spouses who are 65 or older, served during a period of war, and have trouble performing tasks of daily living (bathing, dressing, toileting, etc.) are eligible to receive up to $26,036 annually in non-service connected benefits through the VA to help pay for long-term care, including home health care and nursing home care.  The program is means-tested so there are income and countable asset limits.  Proper advance planning can help veterans qualify under these limits.

Here’s what changed:

On September 18, 2018, the Veterans Administration (VA) published new rules that make it more difficult to qualify for this important benefit. Beginning October 18, 2018, any gifts that you made in the past 36 months, either to a family member or to an irrevocable trust, will be penalized. This means you could be prohibited from qualifying for VA pension benefits for up to 5 years, depending on the amount of the gift.  But the new rules are not retroactive; transfers before October18, 2018 will not be penalized.

There are other requirements to the new rules, but the rule on transfers is the most important and the one that requires urgent action.

Here is what you need to do:

You can still plan under the old rules where there is no penalty for making gifts or transferring funds to an irrevocable trust but you have to act quickly. The new rules go into effect on October 18, 2018, and you must have all planning done by that date.

If you’ve already looked into collecting VA pension and Aid & Attendance benefits but you’ve yet to move forward with your planning, it’s time to take the final step.   And if  you are an older wartime veteran or spouse (or you care about someone who is), and this is the first time you are hearing about these benefits, it’s time to take the first step.  You need to call a VA accredited lawyer right away and get started.

You must get your planning done and make any necessary transfers before October 18th to take advantage of opportunities while they still exist before the new rules go into effect.  It may be advantageous to file your application for VA benefits before October 18, 2018.

If you’re a wartime veteran or spouse and you don’t need care now, the time to plan for the care you may need in the future is still right now. You can work to appropriately arrange your finances today, so that when you apply for benefits down the road, you can qualify without a penalty.

If you don’t know where to start, call me at 301-907-4580 x104 right away.  I’ll refer you to someone who can help.


Most college-bound freshman are over 18.  The law says that makes them adults; parents know better. They are grown-up but new to the world of managing their money, bills and contracts.  New to the world of managing their own medical appointments and follow-ups.

If you need to talk to the bursar’s office about tuition, grants, or loan disbursements you will need your freshman’s authorization.  Ditto if your want to talk to the doctor or nurse-practioner who examined your freshmen.  Other examples abound.

So now is a good time to consider suggesting your new adult appoint you his or her agent under a durable power of attorney and medical agent under a health-care directive and HIPAA release.

Contact us  if you want to look into this off-to-college planning.

It is a lament divorce judges frequently hear.  Since alimony and child support are based on income, you can’t blame the judges for being somewhat cynical.  It is a law of the Universe.  Income decreases in the year of divorce.

But what if you make a million dollars a year?  Carol Rose, estranged spouse of former baseball star, Pete Rose, says that Pete makes at least $100,000 a month signing autographs and making personal appearances.  However, according to Carol, he has spent most of it on high stakes gambling and still owes significant amounts to the casinos and the IRS.

Carol is asking the court to compel Pete to reveal the full details of his finances in their divorce.

Will 2018 be the year you make a Will and complete your estate and disability planning?

If you kick it down the road another year it won’t matter … unless 2018 is the year you die or become incapacitated or disabled.  In that case, those you care about will wish you had planned better, especially if they are financially dependent on you.

If you don’t make a Will before you die you leave an “intestate” estate.  The state has rules governing who gets your property, who has priority for appointment as your personal representative and how any of your property received by minors will be managed.  If you are confident that you and your loved ones will be perfectly satisfied with the state’s choices about all this, you don’t need a Will.

If your beneficiary designations on life insurance, retirement accounts and other financial accounts are based on the state of your family and finances five, ten or more years ago, payment from your financial assets may be delayed or directed to the wrong people.

If you have an inadequate financial power of attorney, or none at all, a court proceeding called guardianship of property may be necessary to manage your property at a cost of thousands of dollars and many wasted hours.

If you have an inadequate advance medical directive and health care power of attorney, or none at all, health care decisions may be adversely impacted.

If you decide you are going to take care of these matters this year, contact Thyden Gross and Callahan, LLP.   We can help.

“Alice is mad at Wayne,” said my wife as we were driving to work together yesterday.

“Oh?  What did he do to make her mad?” I asked.  Alice and Wayne are friends of ours.

“He told her that it must be nice to go out with her friends for lunch while he works to pay for it all.”

“Was he serious or joking?” I said.

“Joking, but in a mean way.  He’s always making little digs at her like that.” my wife replied.

“Did he say it in front of her friends?”

“Yes.  She wrote him an email telling him how much it hurt her,” my wife responded.  “I told her to send him the article on how much it would cost to replace a stay at home mom with private services.”

“It sounds like what he is really trying to say is they need to sit down and work out a budget and agree on how their resources should be allocated,” I said in my most reasonable lawyer voice.  I was trying to find some middle ground to stand on.

“No!” said my wife.  “He calls it his money, but it is really their money.  She gave up a successful career for him.”

“Perhaps he is just using the wrong words to express himself,” I answered.  “What he means is he earns the money that belongs to both of them and he would like to share in the decision of how it is spent.”

“She doesn’t spend any money!” exclaimed my wife.

I told her, “But you just said she went out to lunch with her friends.  Maybe he would like that money  to go into their pension plan.”

‘Their pension plan is fully funded.  He makes lots of money and she spends very little of it,” my wife explained.

“Well, your view is that he’s the bad guy, but I see both sides of it.”

Readers, what do you think?