In a marriage or de facto relationship, lottery wins before, during and even after separation can be included in the asset pool or considered when dividing property between separating spouses. The RMB Lawyers Family & Relationships Law Division explains.
Lottery wins are considered property acquired through an unexpected or chance event without any direct effort on the part of the party who purchases the winning ticket.
The timing of the windfall and the source of the funds used to purchase the winning ticket may be relevant to how the lottery win will be treated in the context of a property settlement.
The Court has held that where a winning lottery ticket was brought during the marriage or de facto relationship it was a windfall and a contribution by both parties. Where both parties receive income and the mode of the marriage or the relationship is based upon each party contributing their respective income to the partnership, the purchase of the winning lottery ticket is regarded as a purchase from joint funds.
Likewise, if one party receives income while the other is involved in domestic activities as the mode of the marriage or de facto relationship, the purchase of the winning lottery ticket is also regarded as a joint and equal contribution.
The Court has decided that a lottery win is not a joint or an equal contribution where the parties are living separate lives and maintaining separate finances. Equally lottery wins post-separation will likely not be considered as an equal contribution, but it does not necessarily follow that the windfall will be excluded from the assets available for distribution.
Farmer v Bramley (2000) is one of the best-known cases that has come before the Court involving a lottery win. It involved a 12-year relationship, with one child. The husband won a lottery prize of around $5 million 18 months after he had separated from his wife.
At the time of separation there were no assets of significance, and no formal property settlement was completed. During the early part of their relationship, the husband suffered from drug-related problems and the wife supported him financially and emotionally throughout his addiction.
The wife also financially supported him while he was studying and assisted him with his literacy skills, and he eventually was able to obtain full-time gainful employment.
After separation the child lived primarily with the wife and had irregular contact with the husband.
The Judge in this case held that the post-separation lottery win was available for distribution between the parties due to the wife’s contributions (financial and non-financial) during the relationship, the disparity in the parties’ post-separation financial circumstances and the wife’s ongoing care of the child without any financial and practical support from the husband.
In this case the wife was awarded $750,000 or 15% of the total windfall.
If you have any questions or concerns in relation to divorce or seperation, your first step should be to contact our office to arrange a free consultation. You can contact us by by phone or our 'Ask a Question' tool on our website.