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Lottery winnings – Who keeps the cash?

in Family Law by Slater and Gordon on
Lottery winnings – Who keeps the cash?

You’ve won the jackpot and the cash is yours to keep, right? Not always. Not if you’re in a relationship that’s unfortunately gone awry.

Do you need to share the winnings with your former partner if you separate?  The answer depends in part on the nature of the relationship at the time the winning ticket was purchased.  The questions below should give you a more holistic understanding on how the law allocates lottery wins.

When is it a 50-50 split?

The Family Court has consistently held that lottery wins that occurred during the course of the marriage or relationship are to be shared equally between the parties.   In the leading case of Zyk and Zyk (1995) the parties had been married for two years when the husband had a lottery win of $95,000.  He had been in a syndicate before the marriage and the wife had no involvement in the lottery purchase. The Court found that it was ‘part of the husband’s general practice’ to hand all his money to the wife who had ‘practical control of the family finances’. The lottery ticket was purchased by the husband from money he had from time to time.  The Court found upon the husband handing the money to the wife she applied it ‘so that it formed part of their property’.  Therefore the purchase of the ticket has come from the shared joint incomes of the parties.  The winnings were used by the parties for joint purposes and therefore were treated as a joint contribution.

When is it NOT a 50-50 split?

The recent Full Court of the Family Court decision in Elford & Elford (2016) has surprised many which expected a lottery win during the relationship to be treated as a joint contribution and be divided equally between the parties.  

In Elford, the Court dismissed the wife’s appeal that she was entitled to a greater share of the property pool, which consisted mainly of lottery winnings. The Court upheld the trial judge’s decision that the winnings were not a ‘joint endeavour’ but rather that the husband had made the sole contribution to the winnings.  

In this case, the parties largely led separate financial lives.  They commenced living together in 2003, married in 2007 and separated in 2012. In 2004, less than a year into the relationship, the husband won $622,842 in a lottery.  These winnings, together with the husband’s savings were deposited into a term deposit in his sole name.   The Wife argued that the lottery money should be treated as a joint contribution by the parties as their marriage was a 'joint endeavour'. The Husband argued that the winnings should be treated as his sole contribution.

The Court stated that it is not only the nature of the parties relationship at the time the lottery ticket was purchased that sets this case apart from so many of the decided lottery winning case it is also the manner in which the husband and the wife conducted their financial affairs after those winnings were received by the husband.

The Court noted in this case that the parties kept all their financials and assets separate for the entirety of their relationship.  They maintained separate bank accounts and did not even have a joint bank account.  The wife stated that this was ‘what he wanted’ even though she was unhappy about it.  

Whose name is the winning ticket under?

The winning ticket was in the husband’s sole name and the funds were deposited into the husband’s bank account. Rather than share or utilise these winnings with the wife during the relationship, he continued to treat his property as his own.

The wife acknowledged that that she did not contribute financially towards the purchase of the ticket, she did not pick the winning numbers, the husband has been buying weekly tickets with those numbers since 1995 and he had purchased the ticket without her assistance. 

The Court found that the husband never intended the weekly purchase of a lottery ticket to be for a ‘joint matrimonial purpose’ and said that the husband did not ‘hand all his money to his wife; nor did she have the practical control of the family finances’.

The Court therefore concluded that it was appropriate to treat the husband’s lottery winnings as a contribution by him alone.

When was the winning ticket purchased?

Ultimately, if the winning ticket was purchased by either party during the relationship it will most likely be regarded as joint property in circumstances where parties deal with their finances together. However, if the parties lead financially separate lives during the relationship and including at the time the winning ticket was purchased then, as the decision in Elford tells us, the outcome might be very different.

Do you have a similar query you’d like to discuss? Get in touch.