A couple of weeks ago there was a story about a woman in California who came forward as the winner of the SuperLotto Plus Jackpot prize of $23 million just days before the winning ticket was about to expire. Apparently she never checked the ticket and had simply left it in her car. Luckily for her, her daughter recognized her mother’s picture from a surveillance camera and alerted her to her winnings. Why hadn’t she checked the ticket? Perhaps she was going through a divorce…
The story reminded me of one of the more difficult concepts for people to understand regarding the accumulation of marital property particularly when a couple is going through divorce proceedings. In Maryland, marital property is defined as any “property, however titled, acquired by one or both parties during the marriage.” MD Ann Code §8-201(e)(1) This means that regardless of whether or not the property is titled in one person’s name or both, if it was acquired during the marriage it is part of the marital estate. So, if the parties buy a car during the marriage and title it solely in the husband’s name, and finance it with only the husband’s name on the loan, it is still marital property and must be considered when determining the division of marital property. This often astounds people who say, “Wait a minute, how can she have a claim to my car? I bought it, it’s in my name, I paid every penny of the car note.” All that is true and yet your spouse still has a property interest claim in your car. You see, once you got married there is no “you” or “me” in terms of property ownership. There is only “us” or “we”.
This gets particularly onerous and hard to understand when the property was acquired after the couple separated. So in the above example, it is still marital property even if the car was purchased after the separation but before the divorce. Imagine the spouse who moves out of the marital home and subsequently buys their own home, titled and financed in their name. If they are still married, then it is still marital property. Complicating the matter is the question of contribution. Say one spouse moves out of the marital home and the spouse who remains continues to pay the entire mortgage and taxes on the home. When it comes time to divide up the property, the one who remained in the house wants a credit for the “contribution” they paid on behalf of the spouse who moved out. If they paid those expenses with money earned from a job (i.e. earned income) they are not entitled to contribution because they used “marital funds” to make those payments. In other words, “we” paid the bills not “I” paid the bills.
So this brings me back to the lottery example. To help illustrate this issue, I often tell clients not to buy lottery tickets while they are separated because if they win, their spouse has a claim to the winnings. This seems to help them understand the concept of accrual of marital property. Note that this is NOT true in Virginia where couples cease to accrue marital property once they are separated. But it is true in Maryland and the District of Columbia. So the morale of the story is, don’t get any new stuff while you are separated. Wait until the divorce is complete before winning $23 million in the lottery.