WINNING LOTTO...AND THEN HAVING TO SHARE IT WITH YOUR EX-SPOUSE
Thu, 25 Jul 2019
A recent American case has made headlines with a Court determining that a man’s $30 million lottery win was to be split, and $15 million was to be paid to his ex-wife, despite the parties having been separated for over two years prior to his win.
Although they had been separated for over two years, they were in the middle of divorce proceedings when Mr Zelasko’s winning numbers came up, and as a result the Court considered that the ticket was purchased with ‘marital money’, was a ‘joint investment’ and thus, the windfall was ‘marital property’.
With the recent hype about the larger-than-ever division 1 lottery jackpots up for grabs in Australia and with four winners from the Gold Coast sharing in over $5M in lotto wins in the past 18 months, it is no surprise that this American case has piqued our interest.
So, if you were lucky enough to win lotto would you have to share your winnings with your ex-spouse?
THE POSITION IN AUSTRALIA
There have been many cases which have come before the Courts in Australia to determine how lottery wins are to be divided between parties to a relationship, however there are no hard and fast rules to go by, and each case will turn on its own facts.
A similar case to Mr Zelasko’s which came before the Australian courts in 2014, albeit the parties had been separated for only 6 months prior to the wife winning $6 Million in the lottery, resulted in the Court deciding that at the time of the win, the parties had commenced the process of leading separate lives, and the win was therefore attributable directly to the wife.
This was despite the husband’s argument that the ticket was purchased with funds drawn from an account which was formerly joint monies, as the Court took the view that the arrangement between the parties to each withdraw funds from the account, and then apply them wholly to purposes unconnected with the former marital relationship meant that the ticket had been purchased solely by the wife, and the lottery proceeds should be taken as a sole contribution on her behalf.
An adjustment of $500,000 was made in the husbands favor on account of the husbands future needs and the disparity in financial position between the parties.
In another Australian case from 2016, the husband had a lottery win of more than $600,000 during his 9 year relationship with his wife (in fact, the win came just a year into their relationship).
Upon separation it appears that the wife received less than 10% of the party’s property pool which was estimated at approximately $1.4M. She subsequently appealed the decision, and one of the grounds she put forward was that the lottery win should have been treated as a joint contribution of the parties, rather than a contribution of the husband only.
However, the Court denied her appeal on the grounds that the manner in which the parties had in fact conducted their affairs during their relationship, including having separate bank accounts, the banking of the lottery proceeds into a bank account in the husband’s sole name and the fact that the husband had purchased lottery tickets for 8 years prior to the relationship commencing, all led the Court to decide that the purchase of the ticket was an endeavor solely of the husband, and therefore was to be treated as a direct financial contribution on his behalf when determining the property split.
This position was consistent with the findings of the Court in the earlier 2014 lottery win case, wherein the Full Court stated words to the effect that the nature of the parties relationship at the time the lottery ticket was purchased is a determining factor, not the source of the funds used to buy the ticket.
Generally speaking, it appears that the Court will take into consideration the way that the parties have managed their finances and bank accounts during the relationship, the stage in the relationship when the lottery was won, and how the lottery proceeds were managed after they were paid out.
However, the case of Zyk, which is often referred to in lottery win cases, arrived at a different decision than those mentioned above (albeit after an appeal) and the Court determined that the lottery prize won by the husband was in fact a joint contribution of the parties and increased the wife’s percentage adjustment accordingly, meaning she received a larger slice of the asset pool than she had been entitled to before the lottery win was included in the calculations.
It is the case of Zyk that gives a more concise breakdown of the matters which the Court should consider in lottery win cases. In the appeal, the Court found that the person who actually purchased the ticket is not in itself a deciding factor, moreover where both parties contribute income to the relationship, or alternatively one party works while the other undertakes homemaker/parenting duties, then the purchase of the ticket should be treated as a purchase from joint funds pending investigation of other factors which may affect the outcome.
As can be seen above, there is no straightforward process to determine whether you would in fact have to share your lottery win with your spouse (or ex-spouse) if you were lucky enough to win, as each case turns on its own facts.
Our family lawyers are available should you need to discuss your individual circumstances, however for a more in-depth insight into the property settlement process, please read our further article here.
If you have any questions in regards to a lottery win, inheritance or windfall, Affinity Lawyers experienced Gold Coast solicitors and family law team are here to help. Please telephone our friendly professional team today on 5563 8970 to arrange your initial consultation.
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