Powerball Fever is Sweeping the Delaware Valley
Countless people in our region are wondering what they would do if they want more than $1 billion in a lottery. We at the firm are not immune to “Powerball Fever.”
The next Powerball jackpot, won by matching all five white balls in any order and the red Powerball, is estimated to be $1.4 billion with an $868 billion immediate cash value. This is the largest lottery payout in North American history. Previously, the largest cash payout in North American was $474 million. With so many people talking about Powerball lottery winnings, we have received numerous legal and non-legal questions from our clients and friends, all of whom are presumably anticipating winning at least a share of this record lottery payout. Here are some lottery questions and their answers related to what we do here at DeMichele & DeMichele:
Are lottery winnings taxable? Yes.
All lottery winnings are subject to federal and New Jersey taxation. The real question is how much? With the winning ticket, you should expect to be in the top tax bracket and pay 39.6% in federal tax plus an additional 8.97% in New Jersey state tax.
Are lottery winnings subject to equitable distribution? Yes.
In most cases, winnings from a lottery ticket that is purchased prior to a complaint being filed in divorce are subject to equitable distribution. In fact, there is a case on point in New Jersey: DeVane v. DeVane, 260 N.J. Super. 501 (1992). In this case, the wife bought a winning lottery ticket while the parties were married. The jackpot was worth 3.2 million dollars. She elected to receive her payout in twenty (20) annual installments of $182,500. The annual payments were sent to her and the check was in her name. Three years later, the complaint in divorce was filed and the wife sought to have the jackpot designated as separate property that did not have to be shared with the soon to be ex-husband. The court ultimately held the lottery jackpot was a marital asset that was subject to equitable distribution. Specifically, the court determined that, As a matter of statutory construction, the clear and unambiguous language of N.J.S.A. 2A:34-23 [New Jersey's Equitable Distribution Statute]mandates a determination that the lottery winnings in the instant case are a marital asset subject to equitable distribution since they were acquired by a party during the marriage and this fortuitous event has not been specifically excepted by Legislature from the statute.”
Will the probation department intercept my lottery winnings to pay child support arrears? Yes.
If a non-custodial parent owes child support in New Jersey and wins more than $600 in the lottery, the amount owed in child support may be deducted from the winnings and applied to the past-due child support. This is commonly known as a “lottery prize intercept.” ____ Win or lose, your burning high-stakes legal questions have answers and we're here to help move the odds in your favor. Do not hesitate to contact the attorneys at DeMichele & DeMichele to schedule your initial consultation. You can also reach us by telephone (856) 546-1350. ____